Computerized method and system for processing data related to a financial instrument having guaranteed benefit payments

ABSTRACT

A computerized financial instrument management system has a data storage device storing data indicative of an account balance based on deposits, withdrawals and changes in value of investments selected by an owner, a payment base value, a guarantee of availability of benefit payments for a term, during time periods during the term, without reduction of the payment base value; and withdrawal factor values correlated with dates after a first of the benefit payments and increasing after the first of the benefit payments. A processor is configured to determine, for any of the time periods, an available amount of the benefit payment, based on data indicative of a withdrawal factor value and at least one of a payment base value and either the payment base value or the account value.

CROSS-REFERENCE TO RELATED APPLICATIONS

This application is a continuation application of co-pending U.S. patentapplication Ser. No. 13/183,001 entitled METHOD AND SYSTEM FORPROCESSING DATA FOR A DEFERRED ANNUITY WITH AVAILABLE BENEFIT PAYMENTSRELATED TO AN INCREASING WITHDRAWAL PERCENT, filed Jul. 14, 2011, whichapplication is a continuation application of U.S. patent applicationSer. No. 11/983,473 entitled METHOD AND SYSTEM FOR A DEFERRED VARIABLEANNUITY WITH LIFETIME BENEFIT PAYMENTS GOVERNED BY AN AGE-BASEDWITHDRAWAL PERCENT, filed Nov. 9, 2007, now U.S. Pat. No. 8,015,092,which application claims priority to and benefit of U.S. ProvisionalPatent Application Ser. No. 60/961,735, filed Jul. 24, 2007, the entirecontents of all of which are herein incorporated by reference for allpurposes.

BACKGROUND OF THE INVENTION

1. Field of the Invention

The present invention relates to a method and system for administering avariable annuity with lifetime benefit payments; and more particularly,to a data processing method for administering a deferred variableannuity contract, the annuity contract having a payment base value, acontract value, and lifetime benefit payments, wherein the lifetimebenefit payment being related to a withdrawal percent and the withdrawalpercent automatically increasing over the term of the annuity contract.

2. Description of the Prior Art

An immediate annuity is typically used to provide an income streamwithin a predetermined length of time from the date the premium isreceived. The amount of income can be either fixed or variable in natureand typically these products do not provide an account value. A deferredannuity is typically used to provide accumulation and, potentially, afuture stream of annuity income. The deferred annuity comprises anaccumulation period during which the account value will vary with theunderlying investments and an annuitization period where the clientpurchases an immediate annuity with the account value available.Deferred and immediate annuities typically provide guaranteed income forlife which transfers some portion or all of the risk of outliving one'saccumulated assets to the insurer.

One basis for distinguishing commonly available deferred annuities iswhether the annuity is classified as a “fixed annuity” or a “variableannuity”.

In a fixed annuity, the insurer guarantees a fixed rate of interestapplicable to each annuity deposit. Therefore, a fixed annuity isdesirable for those seeking a “safe” investment. The guaranteed interestrate may apply for a specified period of time, often one year or more.Often, a rate guaranteed for more than one year is called a “multi-yearguarantee”. The rate credited on a fixed annuity is reset periodically,moving in an amount and a direction that correlate the yields availableon fixed-income investments available to the insurer.

With a variable annuity, the annuity contract owner bears the investmentrisk. The relevant life typically has a choice of funds in which he/shecan direct where the annuity deposits will be invested. The variousfunds or sub-accounts may include stocks, bonds, money marketinstruments, mutual funds, and the like.

Variable annuity contracts typically provide a death benefit. Oftentimesduring the accumulation period this death benefit is related to thecontract value. That is, if the sub-accounts backing the contract valuehave performed poorly, then the death benefit may be reduced to aninsignificant amount. After annuitization, the death benefit can be afunction of the remaining payments of the annuity at the time of therelevant life's death. Further, if the annuity contract does not providea guarantee (discussed below), the contract will terminate when thecontract value goes to zero or some other amount specified in thecontract or rider.

Annuity contracts may also provide guarantees in several differentvariations. A Guaranteed Minimum Death Benefit (GMDB) is a guaranteethat provides a minimum benefit at the death of the relevant liferegardless of the performance of the underlying investments. AGuaranteed Minimum Income Benefit (GMIB) is a guarantee that willprovide a specified income amount at the time the contract isannuitized. The income payment will be dependent on previously stateddetails set out in the contract. A Guaranteed Minimum AccumulationBenefit (GMAB) is a benefit that guarantees a specified contract valueat a certain date in the future, even if actual investment performanceof the contract is less than the guaranteed amount. A Guaranteed MinimumWithdrawal Benefit (GMWB) is a guarantee of income for a specifiedperiod of time, and in some versions, the income stream is guaranteedfor life without requiring annuitization as in the guaranteed minimumincome benefit. However, this guarantee will automatically annuitize thecontract if the contract value is reduced to zero or some other amountspecified in the contract or rider.

Most deferred variable annuity products in the prior art typicallydetermine the amount of the lifetime benefit payments, if any, to be apredetermined percentage of a withdrawal base. The withdrawal baseamount is typically set at the time of the first lifetime benefitpayment and is fixed for the remainder of the term of the annuityproduct. Furthermore, the predetermined percentage, or withdrawalpercent, is typically set at the time of the first lifetime benefitpayment and is fixed for the remainder of the term of the annuityproduct.

Many financial products and systems have been disclosed. These include:a reinsurance system or plan for a variable annuity contract withguaranteed minimum death benefit; a means for determining a guaranteedminimum death benefit claim value from the variable annuity contract;investment consulting, benefit projection and investment analysis ofretirement investments during a pre-retirement accumulation phase andpost-retirement distribution phase; investment portfolio selection,allocation, and management to generate sustainable withdrawals whereinthe distribution amount is, at least in part, based upon a performancelevel of individual investments; generating annuity payments using adynamic asset allocation investment wherein the annuity payment(s) arebased on the performance of the automatically allocated assets; andfinancial instrument(s) providing a guaranteed growth rate and aguarantee of lifetime payments wherein a first guarantee of a protectedvalue is established wherein the protected value includes at least acertain amount based upon the initial account balance growing at aminimum growth rate for a defined period of time, or until one or moredefined events occur. Each one of these prior art references suffersfrom at least the following disadvantage(s): the lifetime benefitpayment, if any, is based on a withdrawal percent that does notautomatically increase over the term of the annuity contract; thelifetime benefit payment, if any, is determined based on a fixedpredetermined percentage of a withdrawal base; and the withdrawal baseis typically fixed for the remainder of the contract or, alternatively,decreases during the remainder of the term.

Accordingly, there remains a need in the art for a data processingmethod for administering a variable annuity contract for a relevant lifewherein the annuity contract has lifetime benefit payments and whereinthe lifetime benefit payment for each period is related to a withdrawalpercent and wherein the withdrawal percent automatically increases overthe term of the annuity contract.

SUMMARY OF THE INVENTION

The present invention provides a data processing method foradministering a deferred variable annuity contract during theaccumulation phase wherein the annuity contract has a guarantee oflifetime benefit payments and wherein the lifetime benefit payment foreach period is related to a withdrawal percent, and the withdrawalpercent automatically increases over the term of the annuity contract.In prior art annuity products, the amount of the lifetime benefitpayments, if any, is determined to be a fixed predetermined percentageof a withdrawal base. This withdrawal base typically is fixed for theremainder of the contract, or alternatively, decreases for the remainderof the term. The fixed percentage is typically set at the time of thefirst lifetime benefit payment.

On the other hand, the data processing method and system of theinvention maintains an annuity with lifetime benefit payments, whereinthe lifetime benefit payment for each period is related to a withdrawalpercent and wherein the withdrawal percent automatically increases overthe term of the annuity contract. The data processing method administersan annuity contract having a payment base value, a contract value,together with lifetime benefit payments.

Generally stated, the method of the invention determines a payment basefor the annuity contract. Preferably, the payment base value is afunction of the previous premium payments and withdrawals by therelevant life, and could include investment performance on an annual orother basis (daily, monthly, etc.). The method determines a withdrawalpercent for the annuity contract. During the accumulation phase thesystem performs the following steps: (i) determining a withdrawalpercent, and (ii) if requested by the relevant life, or if other definedcriteria are reached, determining a lifetime benefit payment withdrawalfor the relevant life which decreases the contract value, wherein thelifetime benefit payment is related to the withdrawal percent andwherein the withdrawal percent automatically increases over the term ofthe annuity contract. Additional premium payments and withdrawals inexcess of the lifetime benefit payment will affect the payment basevalue. The method further determines a benefit amount for the annuitycontract that is equal to the premium payments minus any lifetimebenefit payments or withdrawals. Upon the death of the relevant life,the present method pays a death benefit to a beneficiary, wherein in oneembodiment the death benefit is equal to the present benefit amount.

Preferably, the annuity contract of the data processing method is adeferred variable annuity and further includes sub-accounts whose marketperformance can cause the contract value to decrease. In other aspectsof the invention, the annuity contract may be selected from the group offixed, combination variable/fixed, and equity indexed annuities.

In addition, the account may be subject to M, E & A, 12 b-1 and fundlevel charges. These charges may or may not be assessed against thecontract value.

The guaranteed death benefit is paid to the beneficiary only if therelevant life dies during the accumulation phase. However, a guaranteeddeath benefit may also be payable during annuitization as well. Thelifetime benefit payment may be paid once yearly or periodicallythroughout the year; however, there is a maximum lifetime benefitpayment for any given year. In prior art annuity products, the relevantlife receives lifetime benefit payments that are based on a fixedwithdrawal base, which is typically determined at the time of the firstlifetime benefit payment. On the other hand, the present method allowsthe relevant life to have the opportunity to request a lifetime benefitpayment during each period that is based on a withdrawal percent thatautomatically increases over the term of the annuity contract andtherefore increases with the age of the relevant life. Therefore, thelifetime benefit payment is not based on a fixed percentage of awithdrawal base amount, and the withdrawal percent may increasedepending on the age of the relevant life. Accordingly, the relevantlife has the opportunity to request a lifetime benefit payment that hasthe potential to afford a greater monetary value then the lifetimebenefit payments of prior art annuity products.

In one aspect, the value of the annuity payments, if necessary, equalsthe value of the last guaranteed lifetime benefit payment. In otheraspects, excess withdrawals, required minimum distributions or step-upscould cause the value of the annuity payments or guaranteed lifetimebenefit payments to change.

In another aspect of the invention, there is provided a data processingmethod for administering a deferred variable annuity contract, theannuity contract having a payment base, a contract value and lifetimebenefit payments, comprising the steps of: (i) determining a presentpayment base value; (ii) determining a present contract value; (iii)determining a withdrawal percent; and (iv) calculating a lifetimebenefit payment, wherein the lifetime benefit payment is related to thewithdrawal percent and wherein the withdrawal percent automaticallyincreases over the term of the annuity contract. The invention cancomprise a deferred variable annuity contract having (i) means fordetermining a present payment base; (ii) means for determining a presentcontract value; (iii) means for determining a withdrawal percent; (iv)means for calculating a lifetime benefit payment; wherein the lifetimebenefit payment is related to the withdrawal percent and wherein thewithdrawal percent automatically increases over the term of the annuitycontract.

In another embodiment, the present invention comprises a data processingsystem for administering a deferred variable annuity contract having apayment base, a contract value and lifetime benefit payments,comprising: a storage device; a processor coupled to the storage device,the storage device storing instructions that are utilized by theprocessor, the instructions comprising: (i) determining a presentpayment base; (ii) determining a present contract value; (iii)determining a withdrawal percent; (iv) calculating a lifetime benefitpayment; wherein the lifetime benefit payment is related to thewithdrawal percent and wherein the withdrawal percent automaticallyincreases over the term of the annuity contract.

The present invention solves several of the problems associated withconventional administration of annuity contracts. Determination of thelifetime benefit payment is accomplished via an improved formula thatprovides the potential to afford a greater monetary value for thelifetime benefit payment than prior art annuity contracts. The relevantlife is afforded increased security by the availability of a potentiallyenhanced lifetime benefit payment as they become older.

Other objects, features, and characteristics of the present invention,as well as the methods of operation and functions of the relatedelements of the structure, and the combination of parts and economies ofmanufacture, will become more apparent upon consideration of thefollowing detailed description with reference to the accompanyingdrawings, all of which form a part of this specification.

BRIEF DESCRIPTION OF DRAWINGS

A further understanding of the present invention can be obtained byreference to a preferred embodiment set forth in the illustrations ofthe accompanying drawings. Although the illustrated embodiment is merelyexemplary of systems for carrying out the present invention, both theorganization and method of operation of the invention, in general,together with further objectives and advantages thereof, may be moreeasily understood by reference to the drawings and the followingdescription. The drawings are not intended to limit the scope of thisinvention, which is set forth with particularity in the claims asappended or as subsequently amended, but merely to clarify and exemplifythe invention.

For a more complete understanding of the present invention, reference isnow made to the following drawings in which:

FIG. 1 is a flow chart illustrating the manner in which a new annuitycontract application is processed;

FIG. 2 is a flow chart that illustrates in more detail the manner inwhich an annuity contract is established;

FIG. 3 is a flow chart that illustrates in more detail the manner inwhich an account value is set up;

FIG. 4 is a flow chart that illustrates in more detail the manner inwhich customer communication is established;

FIG. 5 is a flow chart illustrating the appropriate steps after awithdrawal is requested;

FIG. 6 is a flow chart illustrating a preferred embodiment of thepresent invention comprising a data processing method for administeringan annuity contract for a relevant life;

FIG. 7 is a flow chart illustrating an embodiment of the presentinvention comprising a data processing method for administering adeferred annuity product for a relevant life;

FIG. 8 depicts a table illustrating withdrawal percents as a function ofage in accordance with an embodiment of the present invention;

FIG. 9 depicts a table illustrating lifetime benefit payments as afunction of age for annuities associated with various methods inaccordance with an embodiment of the present invention; and

FIG. 10 depicts a graph illustrating lifetime benefit payments as afunction of age for annuities associated with various methods inaccordance with the preferred embodiment of the present invention and asdescribed in FIG. 8 and FIG. 9.

DESCRIPTION OF THE PREFERRED EMBODIMENTS

As required, a detailed illustrative embodiment of the present inventionis disclosed herein. However, techniques, systems and operatingstructures in accordance with the present invention may be embodied in awide variety of forms and modes, some of which may be quite differentfrom those in the disclosed embodiment. Consequently, the specificstructural and functional details disclosed herein are merelyrepresentative, yet in that regard, they are deemed to afford the bestembodiment for purposes of disclosure and to provide a basis for theclaims herein, which define the scope of the present invention. They aredeemed to afford the best embodiment for purposes of disclosure; butshould not be construed as limiting the scope of the invention. Thefollowing presents a detailed description of the preferred embodiment ofthe present invention.

The present invention comprises a data processing method foradministering a deferred variable annuity contract having a paymentbase, a contract value, and lifetime benefit payments. The withdrawalpercent used to calculate the lifetime benefit is not a fixedpercentage. Instead, the withdrawal percent automatically increases overthe term of the annuity contract and with the age of the relevant life.The present data processing method is preferably in the form of a riderto a variable annuity contract. In another aspect of the invention, thepresent data processing method is not in the form of a rider, but is apart of the base contract. In exchange for paying higher fees, therelevant life receives several advantages by selecting the method andsystem of the present invention which provides a lifetime benefitpayment available for each period wherein the lifetime benefit paymentis related to a withdrawal percent and wherein the withdrawal percentautomatically increases over the term of the annuity contract and withthe age of the relevant life. These advantages include the following:the relevant life will have the opportunity to request a lifetimebenefit payment during each period that is related to a withdrawalpercent and wherein the withdrawal percent automatically increases overthe term of the annuity contract and with the age of the relevant life.Therefore, the lifetime benefit payment is not based on a fixedpercentage of a withdrawal base amount, and the withdrawal percent willautomatically increase over the term of the annuity contract and withthe age of the relevant life.

Accordingly, as long as the withdrawal base amount is not decreased bywithdrawals exceeding the lifetime benefit payment amount, the relevantlife has the opportunity to request a lifetime benefit payment that hasthe potential to afford a greater monetary value than prior art annuityproducts. Significantly, the relevant life takes advantage of the higherwithdrawal percent as the relevant life ages, as measured at theanniversary date of each contract period. Therefore, the relevant lifeis given the opportunity to receive higher lifetime benefit payments intheir later years, which will help offset the effects of inflation andhelp offset the increased medical costs that may be associated with oldage. Further, the living benefit payments can increase without having todefer the first withdrawal in order to receive the increase. The presentinvention provides that living benefit payments can increase duringretirement years to pay for escalating medical expenses faced duringretirement. Typically higher benefits are only available during adeferral period, but the present invention allows higher benefits duringthe time in which payments are received.

The present invention comprises a data processing method foradministering a deferred variable annuity contract for a relevant life,the annuity contract having a payment base, a contract value andlifetime benefit payments, comprising the steps of: (i) determining apresent payment base; (ii) determining a present contract value; (iii)determining a withdrawal percent; and (iv) calculating a lifetimebenefit payment wherein the lifetime benefit payment is related to thewithdrawal percent and wherein the withdrawal percent automaticallyincreases over the term of the annuity contract.

In another embodiment, the present invention comprises a data processingsystem for administering a deferred variable annuity contract having apayment base, a contract value and lifetime benefit payments,comprising: a storage device; a processor coupled to the storage device,the storage device storing instructions that are utilized by theprocessor, the instructions comprising: (a) an instruction fordetermining a present payment base; (b) an instruction for determining apresent contract value; (c) an instruction for determining a withdrawalpercent; (d) an instruction for calculating a lifetime benefit payment;wherein the lifetime benefit payment is related to the withdrawalpercent and wherein the withdrawal percent automatically increases overthe term of the annuity contract.

It should be understood that as used herein the term “periodically”includes method steps that in certain aspects may only be performedonce. In other aspects, such “periodically” performed method steps maybe performed more than once as described herein.

The following definitions are given hereunder to better understand termsused in the specification.

“Relevant Life” or “Covered Life”: The term relevant life or coveredlife is the governing life for determination of the living benefitsprovided under this illustrative embodiment. Covered life (or relevantlife) may refer to any one or more of the following: an owner, jointowner, annuitant, joint annuitant, co-owner, co-annuitant orbeneficiary.

“Withdrawal Base”: The withdrawal base is the amount used in oneembodiment of the present invention to determine the lifetime benefitpayment. Preferably, the withdrawal base may be equal to the amount ofthe original premium, the payment base value, the contract value, or thegreater of the payment base value and the contract value.

“Payment Base”: The payment base (PB) (or more accurately the paymentbase value) is the amount used in one embodiment of the presentinvention to determine the lifetime benefit payment and the ridercharge. In one embodiment of the present invention, the initial paymentbase value equals the initial premium.

“Premium”: 100% of the dollar amount of the initial or subsequentpremium payments deposited into the contract before application of anysales charges or payment enhancements.

“Withdrawal Request”: A request made by the relevant life to withdrawfunds during the “accumulation phase” of the contract. One type ofwithdrawal is a lifetime benefit payment. Any withdrawal that is inexcess of the lifetime benefit payment may: (i) decrease the contractvalue below the minimum contract value; (ii) decrease the payment basevalue; and (iii) decrease the guaranteed death benefit.

“Lifetime Benefit Payment”: A benefit payment that is available untilthe death of the relevant life. The lifetime benefit payment may be paidyearly in one embodiment. The total lifetime benefit payment for theyear may also be distributed monthly, quarterly or any other definedperiod. Preferably, the lifetime benefit payment is only available ifthe covered life age is 60 (or other predetermined age) or older.Preferably, if the relevant life is age 59 (or other predetermined age)or younger, the LBP is equal to zero. Other age restrictions can also beutilized for the lifetime benefit payment. Preferably, the lifetimebenefit payment is determined by one of the following formulas:LBP=the greater of:

-   -   “the guaranteed lifetime benefit payment”        (the payment base value)×(the withdrawal percent); and    -   “the maximum lifetime benefit payment”        (the present contract value)×(the withdrawal percent).        It should be understood that in other embodiments of the present        invention, other formulas may be utilized for determining the        lifetime benefit payment.

“Contract Value”: The contract value (CV) is a numerical measure of therelative worth of a variable annuity product during the accumulationphase. The contract value is determined by adding the amount of purchasepayments made during the accumulation phase, deducting management fees,deducting contract fees, deducting optional rider fees and surrendersmade by the owner, and adjusting for the relative increase (or decrease)of the investment option(s) chosen by the owner. It should be understoodthat in other embodiments of the present invention, other formulas maybe utilized for determining the contract value.

“Sub-account”: Variable account investments within the variable annuitycontract, such as mutual funds, stocks and bonds.

“Withdrawal”: Also known as a “surrender”, a relevant life may withdrawup to the contract value at any time.

“Death Benefit”: The death benefit provision guarantees that upon thedeath of the relevant life a death benefit (DB) is paid to a beneficiarynamed in the contract that is equal to the benefit amount. In analternative embodiment, the death benefit is equal to the greater of theguaranteed death benefit or the contract value as of the date that proofof death is received. It should be understood that in other embodimentsof the present invention, other formulas may be utilized for determiningthe guaranteed death benefit.

“Benefit Amount”: In one embodiment of the present invention, thebenefit amount is used to calculate that amount of the death benefit.Preferably, the benefit amount is equal to the premium payments minusany lifetime benefit payments or withdrawals.

“AMF”: Annual Maintenance Fee.

“Annuity Commencement Date”: The annuity commencement date (ACD) is thedate upon which the contract enters the “annuitization phase”.

“Withdrawal Percent”: In one embodiment of the present invention, thewithdrawal percent (WP) is used to determine the amount of the lifetimebenefit payment. It should be understood that in other embodiments ofthe present invention, other formulas may be utilized for determiningthe lifetime benefit payment.

“PB increase”: Payment Base increase.

“Step-Up”: An increase to the payment base value that is available ifthe contract value increases because of favorable performance of theunderlying investments. Preferably, the step-up is guaranteed at apredetermined percentage.

“High Water Mark”: A predetermined threshold. In one embodiment, thehigh water mark is equal to the previously highest contract value (minusthe rider fee) as determined at periodic time intervals.

“Partial Surrender”: Partial surrender means the gross amount of thepartial surrender and will include any applicable contingent deferredsales charges.

“Covered Life Change”: Any contractual change before ACD which causes achange in the covered life will result in a reset in the benefitsprovided under the rider and allows the issuing company to impose thefund allocation restrictions.

“Annuity Contract”: The term annuity contract means a set of rules andother data that are reflected in a computer processing system foroperations of the annuity product.

“Issue Rules”: The issuance of a contract may be subject to establishedrequirements known as issue rules.

The following detailed illustrative embodiment(s) is presented toprovide a more complete understanding of the invention. The specifictechniques, systems, and operating structures set forth to illustratethe principles and practice of the invention may be embodied in a widevariety of sizes, shapes, forms and modes, some of which may be quitedifferent from those in the disclosed embodiment. Consequently, thespecific structural and functional details disclosed herein areexemplary. They are deemed to afford the best embodiment for purposes ofdisclosure; but should not be construed as limiting the scope of theinvention.

Covered Life in Single and Joint/Spousal Election(s)

The covered life, or relevant life, may have a single life election orjoint/spousal continuation election as described more fully herein.

Single Life Election:

If a natural owner, the covered life is the owner and the joint owner(if any) on the contract or rider effective date. If a non-naturalowner—the covered life is the annuitant on the contract or ridereffective date. All age-contingent benefit provisions are based on theattained age of the oldest covered life.

Joint/Spousal Continuation Election:

The covered life is both the owner and the owner's spouse. The owner andthe annuitant must be the same person. The spouse of the owner must bethe contingent annuitant. If a natural owner, the spouse of the ownermust be named as the contingent annuitant and as the beneficiary. Ajoint owner who is not the owner's spouse is not allowed. A beneficiarywho is not the owner's spouse is not allowed. All age-based benefitprovisions are based on the attained age of the youngest covered life.

Setting UP the Contract—Joint Life Elections

For non-qualified contracts where both husband and wife are owners onthe contract, one of the owners is the annuitant, the other is thecontingent annuitant, and as beneficiary. Where either the husband orthe wife is the owner, and there is no joint owner, the owner is theannuitant and the spouse is the contingent annuitant and thebeneficiary.

For qualified contracts, where either the husband or wife is the owner,the owner is annuitant and the spouse is the contingent annuitant andthe beneficiary. If a non-natural owner, the husband or wife isannuitant, the spouse is the contingent annuitant and the beneficiary.The spousal information must be placed in the contingent annuitantfield.

Issues Rules

Issue rules are set forth to provide a more complete understanding ofone illustrative embodiment of the present invention. It should beunderstood by those skilled in the art that these issue rules are setforth for illustrative purposes only and that other rules may beutilized. Accordingly, the issue rules set forth below should not beconstrued as limiting the scope of the invention.

The issue rules may include a maximum issue age. The riders are notavailable if any covered life or annuitant is age 81 (or otherpredetermined age) or greater on the rider effective date. The ridermust be elected on contract issue, the election is irrevocable.

The contract owner must elect, at issue, either joint life or singlelife. The election is irrevocable. The contract owner must be theannuitant. If joint contract owners, one must be the annuitant and theother must be the contingent annuitant. The spouse must be the soleprimary beneficiary.

Calculation of the Withdrawal Percent (WP) for Single Life Elections

The Withdrawal Percent (WP) is used to determine the amount of thelifetime benefit payment. The WP is determined at the later of thecontract issue date, the rider effective date, or a change in thecovered life. The WP may increase automatically on contractanniversaries based on the attained age of the oldest covered life onthe current contract anniversary. If a withdrawal occurs within thefirst five contract years, the WP schedule below will not increase. TheWP will remain equal to the WP percentage at the time of the firstwithdrawal.

The WP attained age schedule is:

-   -   5.0% for attained ages 60 to 64;    -   5.5% for attained ages 65 to 69;    -   6.0% for attained ages 70 to 74;    -   6.5% for attained ages 75 to 79;    -   7.0% for attained ages 80 and above.

Other WP attained age schedules are permitted.

Calculation of the Withdrawal Percent (WP) for Joint Life Elections

The withdrawal percent is used to determine the amount of the lifetimebenefit payment. The WP is determined on the later of the contract issuedate, the rider effective date, or a change in the covered life. The WPmay increase automatically on contract anniversaries based on theattained age of the youngest covered life on the current contractanniversary. If a withdrawal occurs within the first five contractyears, the WP schedule below will not increase. The WP will remain equalto the WP percentage at the time of the first withdrawal.

-   -   The WP attained age schedule is:    -   4.5% for attained ages 60 to 64;    -   5.0% for attained ages 65 to 69;    -   5.5% for attained ages 70 to 74;    -   6.0% for attained ages 75 to 79;    -   6.5% for attained ages 80 and above.        Other WP attained age schedules are permitted.        Calculation of the Benefit Amount

The benefit amount (BA) is the amount available to be paid as a deathbenefit under the terms of the rider. If this rider is effective on thecontract issue date, then the BA equals the initial premium at the ridereffective date. If the rider is effective after the contract issue date,then the BA equals 100% of the dollar amount of the contract value onthe rider effective date, less any payment enhancements received in thelast 12 months.

When subsequent premium payments are received, the BA will be increasedby 100% of the dollar amount of the subsequent premium payment(s).Whenever a partial surrender is made prior to the contract anniversaryimmediately following the covered life's 60^(th) birthday (or otherpredetermined age), the BA is reset to the greater of zero or the lesserof (i) or (ii) as follows:

-   -   (i) the contract value immediately following the partial        surrender; or    -   (ii) the BA immediately prior to the partial surrender, less the        amount of partial surrender.        Whenever a partial surrender is made on or after the contract        anniversary immediately following the covered life's 60^(th)        birthday (or other predetermined age), the BA will be equal to        the amount determined in either (i), (ii) or (iii) as follows:    -   (i) If the total partial surrenders since the most recent        contract anniversary are equal to or less than the lifetime        benefit payment (LBP), the BA becomes the BA immediately prior        to the partial surrender, less the amount of partial surrender.    -   (ii) If the total partial surrenders since most recent contract        anniversary are more than the LBP, but all partial surrenders        were paid under the Automatic Income RMD (AI RMD), the BA        becomes the BA immediately prior to the partial surrender, less        the amount of partial surrender.    -   (iii) If the total partial surrenders since the most recent        contract anniversary exceed the total LBP and the AI RMD        exception in (B) does not apply, the BA is reset to the greater        of zero or the lesser of (A) or (B) as follows:    -   (A) the contract value immediately following the partial        surrender; or    -   (B) the BA immediately prior to the partial surrender, less the        amount of partial surrender.        The maximum BA is $5,000,000.

Example 1: Monthly Benefit Amount Calculation, No Withdrawals - AssumesSingle Life Election, Covered Life is Age 60 at Issue. Benefit PremiumContract Surrender Contract Amount Age Date BOM Value BOM Amount ValueEOM EOM 60 Jan. 01, 2005 $100,000 $100,000 $0 $100,200 $100,000 60 Feb.01, 2005 $0 $100,200 $0 $100,501 $100,000 60 Mar. 01, 2005 $0 $100,501$0 $101,305 $100,000 60 Apr. 01, 2005 $100,000 $201,305 $0 $201,707$200,000 60 May 01, 2005 $0 $201,707 $0 $203,724 $200,000 60 Jun. 01,2005 $0 $203,724 $0 $215,948 $200,000 60 Jul. 01, 2005 $0 $215,948 $0$217,027 $200,000 60 Aug. 01, 2005 $0 $217,027 $0 $218,330 $200,000 60Sep. 01, 2005 $0 $218,330 $0 $216,146 $200,000 60 Oct. 01, 2005 $0$216,146 $0 $211,823 $200,000 60 Nov. 01, 2005 $0 $211,823 $0 $212,883$200,000 60 Dec. 01, 2005 $0 $212,883 $0 $213,521 $200,000 61 Jan. 01,2006 $0 $213,521 $0 $214,375 $200,000 61 Feb. 01, 2006 $0 $214,375 $0$215,447 $200,000 61 Mar. 01, 2006 $50,000 $265,447 $0 $266,243 $250,00061 Apr. 01, 2006 $0 $266,243 $0 $267,308 $250,000 Example Notes: Linesin grey indicate subsequent premium payments.Calculation of the Payment Base (PB)

The Payment Base (PB) (or more accurately payment base value) is theamount used to determine the lifetime benefit payment (LBP) and therider fee. At the rider effective date, the PB equals the benefitamount. When subsequent premium payments are received, the PB is resetto equal the benefit amount. Whenever a partial surrender is made priorto the contract anniversary immediately following the covered life's60^(th) birthday (or other predetermined age), the PB is reset to equalthe benefit amount. Whenever a partial surrender is made on or after thecontract anniversary immediately following the covered life's 60^(th)birthday (or other predetermined age), which exceeds the lifetimebenefit payment and all partial surrenders were not paid under theAutomatic Income RMD (AI RMD), the PB is reset to equal the benefitamount.

Example 2: Expand example 1 to show Payment Base - Assumes Single LifeElection, Covered Life is Age 60 at Issue. Contract Benefit PaymentPremium Contract Surrender Value Amount Base Age Date BOM Value BOMAmount EOM EOM EOM 60 Jan. 01, 2005 $100,000 $100,000 $0 $100,200$100,000 $100,000 60 Feb. 01, 2005 $0 $100,200 $0 $100,501 $100,000$100,000 60 Mar. 01, 2005 $0 $100,501 $0 $101,305 $100,000 $100,000 60Apr. 01, 2005 $100,000 $201,305 $0 $201,707 $200,000 $200,000 60 May 01,2005 $0 $201,707 $0 $203,724 $200,000 $200,000 60 Jun. 01, 2005 $0$203,724 $0 $215,948 $200,000 $200,000 60 Jul. 01, 2005 $0 $215,948 $0$217,027 $200,000 $200,000 60 Aug. 01, 2005 $0 $217,027 $0 $218,330$200,000 $200,000 60 Sep. 01, 2005 $0 $218,330 $0 $216,146 $200,000$200,000 60 Oct. 01, 2005 $0 $216,146 $0 $211,823 $200,000 $200,000 60Nov. 01, 2005 $0 $211,823 $0 $212,883 $200,000 $200,000 60 Dec. 01, 2005$0 $212,883 $0 $213,521 $200,000 $200,000 61 Jan. 01, 2006 $0 $213,521$0 $214,375 $200,000 $200,000 61 Feb. 01, 2006 $0 $214,375 $0 $215,447$200,000 $200,000 61 Mar. 01, 2006 $50,000 $265,447 $0 $266,243 $250,000$250,000 61 Apr. 01, 2006 $0 $266,243 $0 $267,308 $250,000 $250,000Calculation of the Lifetime Benefit PaymentSingle Life Elections

For single life elections, the lifetime benefit payment (LBP) isavailable until the death of any covered life.

Joint Life Elections

For joint life elections, the lifetime benefit payment (LBP) isavailable until the death of last surviving spouse.

-   -   If the covered life is age 60 (or other predetermined age) or        older on the rider effective date, the LBP is equal to the        payment base multiplied by the WP for the covered life's        attained age.    -   If the covered life is age 59 (or other predetermined age) or        younger on the rider effective date, the LBP is equal to zero.

On any contract anniversary immediately following the covered life's60^(th) birthday (or other predetermined age), the LBP is equal to thepayment base multiplied by the WP for the covered life's attained age onthe most recent contract anniversary. When a subsequent premium paymentis made after the contract anniversary immediately following the coveredlife's 60^(th) birthday (or other predetermined age), the LBP is equalto the WP for the covered life's attained age, on the most recentcontract anniversary, times PB immediately after the subsequent premiumis received.

Whenever a partial surrender is made after the contract anniversaryimmediately following the covered life's 60^(th) birthday (or otherpredetermined age), the LBP will be equal to zero. During the deferralstage, subsequent premiums may be made to re-establish the PB and theLBP. The LBP will be equal to the any of the following.

-   -   (i) If the total partial surrenders since the most recent        contract anniversary are equal to or less than the current        lifetime benefit payment (LBP), the LBP is equal to the LBP        immediately prior to the partial surrender.    -   (ii) If the total partial surrenders since the most recent        contract anniversary are more than the LBP, but all partial        surrenders were paid under the Automatic Income Required Minimum        Distribution (AI RMD), the provisions of (i) above will apply.    -   (iii) If the total partial surrenders since the most recent        contract anniversary are more than the current LBP and the AI        RMD exception in (ii) above does not apply, the LBP is reset to        the PB immediately after the partial surrender times the WP for        the covered life's attained age on the most recent contract        anniversary.

The contract owner may request an amount less than, equal to, or greaterthan the lifetime benefit payment. Total partial surrenders taken duringa contract year on or after the contract anniversary immediatelyfollowing the covered life's 60^(th) birthday (or other predeterminedage) which exceed the LBP may reduce future LBP values and may reducethe BA and the PB. If the total amount requested by the contract ownerduring a contract year is less than the lifetime benefit payment, theexcess cannot be carried over to increase future years' lifetime benefitpayments.

Example 3: Expand Example 2 to Show LBP Amount, No Withdrawals. AssumesSingle Life Election, Covered Life is 60 at Issue Contract ContractBenefit Payment Premium Value Surrender Value Amount Base Monthly AgeDate BOM BOM Amount EOM EOM EOM LBP 60 Jan. 01, 2005 $100,000 $100,000$0 $100,200 $100,000 $100,000 $416.67 60 Feb. 01, 2005 $0 $100,200 $0$100,501 $100,000 $100,000 $416.67 60 Mar. 01, 2005 $0 $100,501 $0$101,305 $100,000 $100,000 $416.67 60 Apr. 01, 2005 $100,000 $201,305 $0$201,707 $200,000 $200,000 $833.33 60 May 01, 2005 $0 $201,707 $0$203,724 $200,000 $200,000 $833.33 60 Jun. 01, 2005 $0 $203,724 $0$215,948 $200,000 $200,000 $833.33 60 Jul. 01, 2005 $0 $215,948 $0$217,027 $200,000 $200,000 $833.33 60 Aug. 01, 2005 $0 $217,027 $0$218,330 $200,000 $200,000 $833.33 60 Sep. 01, 2005 $0 $218,330 $0$216,146 $200,000 $200,000 $833.33 60 Oct. 01, 2005 $0 $216,146 $0$211,823 $200,000 $200,000 $833.33 60 Nov. 01, 2005 $0 $211,823 $0$212,883 $200,000 $200,000 $833.33 60 Dec. 01, 2005 $0 $212,883 $0$213,521 $200,000 $200,000 $833.33 61 Jan. 01, 2006 $0 $213,521 $0$214,375 $200,000 $200,000 $833.33 61 Feb. 01, 2006 $0 $214,375 $0$215,447 $200,000 $200,000 $833.33 61 Mar. 01, 2006 $50,000 $265,447 $0$266,243 $250,000 $250,000 $1,041.67 61 Apr. 01, 2006 $0 $266,243 $0$267,308 $250,000 $250,000 $1,041.67 Example Notes: The monthly LBP isnot a defined term; it is used here for illustration only and equals thecontract year LBP divided by 12.

Example 4: Expand Example 3 to Show LBP Amount Attained Age Increases,No Withdrawals. Assumes Single Life Election, Covered Life is 60 atIssue Contract Contract Benefit Payment Premium Value Surrender ValueAmount Base Annual Age Date BOM BOM Amount EOM EOM EOM WP LBP 60 Jan.01, 2005 $100,000 $100,000 $0 $100,200 $100,000 $100,000 5.0% $5,000 60Feb. 01, 2005 $0 $100,200 $0 $100,501 $100,000 $100,000 5.0% $5,000 60Mar. 01, 2005 $0 $100,501 $0 $101,305 $100,000 $100,000 5.0% $5,000 60Apr. 01, 2005 $100,000 $201,305 $0 $201,707 $200,000 $200,000 5.0%$10,000 60 May 01, 2005 $0 $201,707 $0 $203,724 $200,000 $200,000 5.0%$10,000 60 Jun. 01, 2005 $0 $203,724 $0 $215,948 $200,000 $200,000 5.0%$10,000 60 Jul. 01, 2005 $0 $215,948 $0 $217,027 $200,000 $200,000 5.0%$10,000 60 Aug. 01, 2005 $0 $217,027 $0 $218,330 $200,000 $200,000 5.0%$10,000 60 Sep. 01, 2005 $0 $218,330 $0 $216,146 $200,000 $200,000 5.0%$10,000 60 Oct. 01, 2005 $0 $216,146 $0 $211,823 $200,000 $200,000 5.0%$10,000 60 Nov. 01, 2005 $0 $211,823 $0 $212,883 $200,000 $200,000 5.0%$10,000 60 Dec. 01, 2005 $0 $212,883 $0 $213,521 $200,000 $200,000 5.0%$10,000 61 Jan. 01, 2006 $0 $213,521 $0 $214,375 $200,000 $200,000 5.0%$10,000 61 Feb. 01, 2006 $0 $214,375 $0 $215,447 $200,000 $200,000 5.0%$10,000 61 Mar. 01, 2006 $50,000 $265,447 $0 $266,243 $250,000 $250,0005.0% $12,500 61 Apr. 01, 2006 $0 $266,243 $0 $267,308 $250,000 $250,0005.0% $12,500 62 Jan. 01, 2007 $0 $267,308 $0 $267,843 $250,000 $250,0005.0% $12,500 63 Jan. 01, 2008 $0 $267,843 $0 $268,647 $250,000 $250,0005.0% $12,500 64 Jan. 01, 2009 $0 $268,647 $0 $270,796 $250,000 $250,0005.0% $12,500 65 Jan. 01, 2010 $0 $270,796 $0 $271,337 $250,000 $250,0005.5% $13,750 66 Jan. 01, 2011 $0 $271,337 $0 $274,051 $250,000 $250,0005.5% $13,750 67 Jan. 01, 2012 $0 $274,051 $0 $290,494 $250,000 $250,0005.5% $13,750 68 Jan. 01, 2013 $0 $290,494 $0 $291,946 $250,000 $250,0005.5% $13,750 69 Jan. 01, 2014 $0 $291,946 $0 $293,698 $250,000 $250,0005.5% $13,750 70 Jan. 01, 2015 $0 $293,698 $0 $290,761 $250,000 $250,0006.0% $15,000 71 Jan. 01, 2016 $0 $290,761 $0 $284,946 $250,000 $250,0006.0% $15,000 72 Jan. 01, 2017 $0 $284,946 $0 $286,370 $250,000 $250,0006.0% $15,000 73 Jan. 01, 2018 $0 $286,370 $0 $287,230 $250,000 $250,0006.0% $15,000 74 Jan. 01, 2019 $0 $287,230 $0 $288,379 $250,000 $250,0006.0% $15,000 75 Jan. 01, 2020 $0 $288,379 $0 $289,820 $250,000 $250,0006.5% $16,250 76 Jan. 01, 2021 $0 $289,820 $0 $290,690 $250,000 $250,0006.5% $16,250 77 Jan. 01, 2022 $0 $290,690 $0 $291,853 $250,000 $250,0006.5% $16,250 78 Jan. 01, 2023 $0 $291,853 $0 $292,436 $250,000 $250,0006.5% $16,250 79 Jan. 01, 2024 $0 $292,436 $0 $293,314 $250,000 $250,0006.5% $16,250 80 Jan. 01, 2025 $0 $293,314 $0 $295,660 $250,000 $250,0007.0% $17,500 81 Jan. 01, 2026 $0 $295,660 $0 $296,251 $250,000 $250,0007.0% $17,500 Example Notes: The time scale jumps to yearly at age 62.The WP increases on the contract anniversary immediately following the65^(th), 70^(th), 75^(th), and 80^(th) birthdays of the covered life.

Example 5: Expand Example 4 to Show Effect of LBP Withdrawals. AssumesSingle Life Election, Covered Life Was 55 at Issue Contract ContractBenefit Payment Premium Value Surrender Value Amount Base Annual AgeDate BOM BOM Amount EOM EOM EOM WP LBP 60 Jan. 01, 2005 $100,000$100,000 $0 $100,200 $100,000 $100,000 5.0% $5,000 60 Feb. 01, 2005 $0$100,200 $0 $100,501 $100,000 $100,000 5.0% $5,000 60 Mar. 01, 2005 $0$100,501 $0 $101,305 $100,000 $100,000 5.0% $5,000 60 Apr. 01, 2005$100,000 $201,305 $0 $201,707 $200,000 $200,000 5.0% $10,000 60 May 01,2005 $0 $201,707 $0 $203,724 $200,000 $200,000 5.0% $10,000 60 Jun. 01,2005 $0 $203,724 $0 $215,948 $200,000 $200,000 5.0% $10,000 60 Jul. 01,2005 $0 $215,948 $0 $217,027 $200,000 $200,000 5.0% $10,000 60 Aug. 01,2005 $0 $217,027 $0 $218,330 $200,000 $200,000 5.0% $10,000 60 Sep. 01,2005 $0 $218,330 $0 $216,146 $200,000 $200,000 5.0% $10,000 60 Oct. 01,2005 $0 $216,146 $0 $211,823 $200,000 $200,000 5.0% $10,000 60 Nov. 01,2005 $0 $211,823 $0 $212,883 $200,000 $200,000 5.0% $10,000 60 Dec. 01,2005 $0 $212,883 $0 $213,521 $200,000 $200,000 5.0% $10,000 61 Jan. 01,2006 $0 $213,521 $0 $214,375 $200,000 $200,000 5.0% $10,000 61 Feb. 01,2006 $0 $214,375 $0 $215,447 $200,000 $200,000 5.0% $10,000 61 Mar. 01,2006 $50,000 $265,447 $0 $266,243 $250,000 $250,000 5.0% $12,500 61 Apr.01, 2006 $0 $266,243 $0 $267,308 $250,000 $250,000 5.0% $12,500 62 Jan.01, 2007 $0 $267,308 $12,500 $255,318 $237,500 $250,000 5.0% $12,500 63Jan. 01, 2008 $0 $255,318 $12,500 $243,547 $225,000 $250,000 5.0%$12,500 64 Jan. 01, 2009 $0 $243,547 $12,500 $232,895 $212,500 $250,0005.0% $12,500 65 Jan. 01, 2010 $0 $232,895 $12,500 $220,836 $200,000$250,000 5.5% $13,750 66 Jan. 01, 2011 $0 $220,836 $13,750 $209,157$186,250 $250,000 5.5% $13,750 67 Jan. 01, 2012 $0 $209,157 $13,750$207,131 $172,500 $250,000 5.5% $13,750 68 Jan. 01, 2013 $0 $207,131$13,750 $194,348 $158,750 $250,000 5.5% $13,750 69 Jan. 01, 2014 $0$194,348 $13,750 $181,681 $145,000 $250,000 5.5% $13,750 70 Jan. 01,2015 $0 $181,681 $13,750 $166,252 $131,250 $250,000 6.0% $15,000 71 Jan.01, 2016 $0 $166,252 $15,000 $148,227 $116,250 $250,000 6.0% $15,000 72Jan. 01, 2017 $0 $148,227 $15,000 $133,893 $101,250 $250,000 6.0%$15,000 73 Jan. 01, 2018 $0 $133,893 $15,000 $119,250 $86,250 $250,0006.0% $15,000 74 Jan. 01, 2019 $0 $119,250 $15,000 $104,667 $71,250$250,000 6.0% $15,000 75 Jan. 01, 2020 $0 $104,667 $15,000 $90,115$56,250 $250,000 6.5% $16,250 76 Jan. 01, 2021 $0 $90,115 $16,250$74,087 $40,000 $250,000 6.5% $16,250 77 Jan. 01, 2022 $0 $74,087$16,250 $58,068 $23,750 $250,000 6.5% $16,250 78 Jan. 01, 2023 $0$58,068 $16,250 $41,902 $7,500 $250,000 6.5% $16,250 79 Jan. 01, 2024 $0$41,902 $16,250 $25,729 $0 $250,000 6.5% $16,250 80 Jan. 01, 2025 $0$25,729 $16,250 $9,555 $0 $250,000 7.0% $17,500 81 Jan. 01, 2026 $0$9,555 $17,500 $0 $0 $250,000 7.0% $17,500 Example Notes: Since thepartial surrenders do not exceed the LBP, the partial surrenders onlyaffect the BA not the PB.

Example 6: Expand Example 5 to Show Effect of Withdrawals Exceeding LBP.Assumes Single Life Election, Covered Life Was 55 at Issue ContractBenefit Payment Premium Value Surrender Contract Amount Base Annual AgeDate BOM BOM Amount Value EOM EOM EOM WP LBP 60 Jan. 01, 2005 $100,000$100,000 $0 $100,200 $100,000 $100,000 5.0% $5,000 60 Feb. 01, 2005 $0$100,200 $0 $100,501 $100,000 $100,000 5.0% $5,000 60 Mar. 01, 2005 $0$100,501 $0 $101,305 $100,000 $100,000 5.0% $5,000 60 Apr. 01, 2005$100,000 $201,305 $0 $201,707 $200,000 $200,000 5.0% $10,000 60 May 01,2005 $0 $201,707 $0 $203,724 $200,000 $200,000 5.0% $10,000 60 Dec. 01,2005 $0 $212,883 $0 $213,521 $200,000 $200,000 5.0% $10,000 61 Jan. 01,2006 $0 $213,521 $0 $214,375 $200,000 $200,000 5.0% $10,000 61 Feb. 01,2006 $0 $214,375 $0 $215,447 $200,000 $200,000 5.0% $10,000 61 Mar. 01,2006 $50,000 $265,447 $0 $266,243 $250,000 $250,000 5.0% $12,500 61 Apr.01, 2006 $0 $266,243 $0 $267,308 $250,000 $250,000 5.0% $12,500 62 Jan.01, 2007 $0 $267,308 $12,500 $255,318 $237,500 $250,000 5.0% $12,500 63Jan. 01, 2008 $0 $255,318 $12,500 $243,547 $225,000 $250,000 5.0%$12,500 64 Jan. 01, 2009 $0 $243,547 $12,500 $232,895 $212,500 $250,0005.0% $12,500 65 Jan. 01, 2010 $0 $232,895 $12,500 $220,836 $200,000$250,000 5.5% $13,750 66 Jan. 01, 2011 $0 $220,836 $13,750 $209,157$186,250 $250,000 5.5% $13,750 67 Jan. 01, 2012 $0 $209,157 $13,750$207,131 $172,500 $250,000 5.5% $13,750 68 Jan. 01, 2013 $0 $207,131$13,750 $194,348 $158,750 $250,000 5.5% $13,750 69 Jan. 01, 2014 $0$194,348 $13,750 $181,681 $145,000 $250,000 5.5% $13,750 70 Jan. 01,2015 $0 $181,681 $13,750 $166,252 $131,250 $250,000 6.0% $15,000 71 Jan.01, 2016 $0 $166,252 $20,000 $143,327 $111,250 $111,250 6.0% $6,675 72Jan. 01, 2017 $0 $143,327 $6,675 $137,335 $104,575 $111,250 6.0% $6,67573 Jan. 01, 2018 $0 $137,335 $6,675 $131,052 $97,900 $111,250 6.0%$6,675 74 Jan. 01, 2019 $0 $131,052 $6,675 $124,875 $91,225 $111,2506.0% $6,675 75 Jan. 01, 2020 $0 $124,875 $6,675 $118,791 $84,550$111,250 6.5% $7,231 76 Jan. 01, 2021 $0 $118,791 $7,231 $111,894$77,319 $111,250 6.5% $7,231 77 Jan. 01, 2022 $0 $111,894 $7,231$105,082 $70,088 $111,250 6.5% $7,231 78 Jan. 01, 2023 $0 $105,082$7,231 $98,046 $62,856 $111,250 6.5% $7,231 79 Jan. 01, 2024 $0 $98,046$7,231 $91,087 $55,625 $111,250 6.5% $7,231 80 Jan. 01, 2025 $0 $91,087$7,231 $84,527 $48,394 $111,250 7.0% $7,788 81 Jan. 01, 2026 $0 $84,527$7,788 $76,893 $40,606 $111,250 7.0% $7,788 82 Jan. 01, 2027 $0 $76,893$9,000 $16,973 $16,973 $16,973 7.0% $1,188 Example Notes: The partialsurrender at age 71 exceeds the LBP. Therefore the BA is reset to thelesser of the contract value after the partial surrender or the BA priorto the partial surrender less the amount of the partial surrender. Inthis case, the BA prior to the partial surrender less the amount of thepartial surrender is less than the contract value. The surrender at age82 exceeds the LBP. Therefore the BA is reset to the lesser of thecontract value after the surrender, or the BA less the amount of thepartial surrender. In this case, the contract value after the surrenderis less than the BA prior to the surrender less the amount of thesurrender. For both withdrawals exceeding the LBP, the PB is reset tothe BA after the partial surrender and the LBP is reset to the PB timesthe WP for the attained age of the covered life.

Example 7: Expand Example 6 to Show Effect of Withdrawals Exceeding LBP.Assumes Joint Life Election, Covered Life Was 55 at Issue. ContractContract Benefit Payment Premium Value Surrender Value Amount BaseAnnual Age Date BOM BOM Amount EOM EOM EOM WP LBP 60 Jan. 01, 2005$100,000 $100,000 $0 $100,200 $100,000 $100,000 4.5% $4,500 60 Feb. 01,2005 $0 $100,200 $0 $100,501 $100,000 $100,000 4.5% $4,500 60 Mar. 01,2005 $0 $100,501 $0 $101,305 $100,000 $100,000 4.5% $4,500 60 Apr. 01,2005 $100,000 $201,305 $0 $201,707 $200,000 $200,000 4.5% $9,000 60 May01, 2005 $0 $201,707 $0 $203,724 $200,000 $200,000 4.5% $9,000 60 Dec.01, 2005 $0 $212,883 $0 $213,521 $200,000 $200,000 4.5% $9,000 61 Jan.01, 2006 $0 $213,521 $0 $214,375 $200,000 $200,000 4.5% $9,000 61 Feb.01, 2006 $0 $214,375 $0 $215,447 $200,000 $200,000 4.5% $9,000 61 Mar.01, 2006 $50,000 $265,447 $0 $266,243 $250,000 $250,000 4.5% $11,250 61Apr. 01, 2006 $0 $266,243 $0 $267,308 $250,000 $250,000 4.5% $11,250 62Jan. 01, 2007 $0 $267,308 $11,250 $256,571 $238,750 $250,000 4.5%$11,250 63 Jan. 01, 2008 $0 $256,571 $11,250 $246,057 $227,500 $250,0004.5% $11,250 64 Jan. 01, 2009 $0 $246,057 $11,250 $236,685 $216,250$250,000 4.5% $11,250 65 Jan. 01, 2010 $0 $236,685 $11,250 $225,886$205,000 $250,000 5.0% $12,500 66 Jan. 01, 2011 $0 $225,886 $12,500$215,520 $192,500 $250,000 5.0% $12,500 67 Jan. 01, 2012 $0 $215,520$12,500 $215,201 $180,000 $250,000 5.0% $12,500 68 Jan. 01, 2013 $0$215,201 $12,500 $203,714 $167,500 $250,000 5.0% $12,500 69 Jan. 01,2014 $0 $203,714 $12,500 $192,362 $155,000 $250,000 5.0% $12,500 70 Jan.01, 2015 $0 $192,362 $12,500 $178,063 $142,500 $250,000 5.5% $13,750 71Jan. 01, 2016 $0 $178,063 $20,000 $154,902 $122,500 $122,500 5.5% $6,73872 Jan. 01, 2017 $0 $154,902 $6,738 $148,905 $115,763 $122,500 5.5%$6,738 73 Jan. 01, 2018 $0 $148,905 $6,738 $142,594 $109,025 $122,5005.5% $6,738 74 Jan. 01, 2019 $0 $142,594 $6,738 $136,400 $102,288$122,500 5.5% $6,738 75 Jan. 01, 2020 $0 $136,400 $6,738 $130,311$95,550 $122,500 6.0% $7,350 76 Jan. 01, 2021 $0 $130,311 $7,350$123,330 $88,200 $122,500 6.0% $7,350 77 Jan. 01, 2022 $0 $123,330$7,350 $116,444 $80,850 $122,500 6.0% $7,350 78 Jan. 01, 2023 $0$116,444 $7,350 $109,312 $73,500 $122,500 6.0% $7,350 79 Jan. 01, 2024$0 $109,312 $7,350 $102,268 $66,150 $122,500 6.0% $7,350 80 Jan. 01,2025 $0 $102,268 $7,350 $95,677 $58,800 $122,500 6.5% $7,963 81 Jan. 01,2026 $0 $95,677 $7,963 $87,890 $50,838 $122,500 6.5% $7,963 82 Jan. 01,2027 $0 $87,890 $9,000 $19,723 $19,723 $19,723 6.5% $1,282 ExampleNotes: The partial surrender at age 71 exceeds the LBP. Therefore the BAis reset to the lesser of the contract value after the partial surrenderor the BA prior to the partial surrender less the amount of the partialsurrender. In this case, the BA prior to the partial surrender less theamount of the partial surrender is less than the contract value. Thesurrender at age 82 exceeds the LBP. Therefore the BA is reset to thelesser of the contract value after the surrender, or the BA less theamount of the partial surrender. In this case, the contract value afterthe surrender is less than the BA prior to the surrender less the amountof the surrender. For both withdrawals exceeding the LBP, the PB isreset to the BA after the partial surrender and the LBP is reset to thePB times the WP for the attained age of the covered life.

Example 8: Show Effect of Withdrawals Prior to Age 60. Assumes SingleLife Election, Covered Life is 50 at Issue. Contract Surrender ContractBenefit Payment Premium Value Amount Value Amount Base WP Annual AgeDate BOY BOY BOY EOY EOY EOY EOY LBP 55 Jan. 01, 2005 $100,000 $100,000$0 $102,000 $100,000 $100,000 0.0% $0 56 Jan. 01, 2006 $0 $102,000 $0$92,820 $100,000 $100,000 0.0% $0 57 Jan. 01, 2007 $0 $92,820 $10,000$75,366 $75,366 $75,366 0.0% $0 58 Jan. 01, 2008 $0 $75,366 $0 $71,598$75,366 $75,366 0.0% $0 59 Jan. 01, 2009 $0 $71,598 $0 $75,894 $75,366$75,366 0.0% $0 60 Jan. 01, 2010 $0 $75,894 $3,768 $73,568 $71,598$75,366 5.0% $3,768 61 Jan. 01, 2011 $0 $73,568 $3,768 $71,894 $67,830$75,366 5.0% $3,768 62 Jan. 01, 2012 $0 $71,894 $3,768 $70,851 $64,062$75,366 5.0% $3,768 63 Jan. 01, 2013 $0 $70,851 $3,768 $67,753 $60,293$75,366 5.0% $3,768 64 Jan. 01, 2014 $0 $67,753 $3,768 $67,184 $56,525$75,366 5.0% $3,768 65 Jan. 01, 2015 $0 $67,184 $3,768 $68,489 $52,757$75,366 5.5% $4,145 66 Jan. 01, 2016 $0 $68,489 $4,145 $60,483 $48,612$75,366 5.5% $4,145 67 Jan. 01, 2017 $0 $60,483 $4,145 $58,028 $44,466$75,366 5.5% $4,145 68 Jan. 01, 2018 $0 $58,028 $4,145 $56,039 $40,321$75,366 5.5% $4,145 69 Jan. 01, 2019 $0 $56,039 $4,145 $54,488 $36,176$75,366 5.5% $4,145 70 Jan. 01, 2020 $0 $54,488 $4,145 $47,322 $32,031$75,366 6.0% $4,522 71 Jan. 01, 2021 $0 $47,322 $4,522 $41,944 $27,509$75,366 6.0% $4,522 72 Jan. 01, 2022 $0 $41,944 $4,522 $37,422 $22,987$75,366 6.0% $4,522 73 Jan. 01, 2023 $0 $37,422 $4,522 $34,545 $18,465$75,366 6.0% $4,522 74 Jan. 01, 2024 $0 $34,545 $4,522 $32,726 $13,943$75,366 6.0% $4,522 75 Jan. 01, 2025 $0 $32,726 $4,522 $29,332 $9,421$75,366 6.5% $4,899 76 Jan. 01, 2026 $0 $29,332 $4,899 $25,166 $4,522$75,366 6.5% $4,899 77 Jan. 01, 2027 $0 $25,166 $4,899 $20,470 $0$75,366 6.5% $4,899 Example Notes: The partial surrender at age 57reduces the BA to the lesser of the contract value after the surrenderor the BA prior to the surrender, less the amount of the surrender. Inthis case, the contract value after the surrender is the lesser value.The LBP at age 60 is the WP times the PB at age 60. LBP is zero untilclient is age 60. Client is 55 at issue, so 5 year wait is satisfiedbefore first surrender

Example 9: Show Effect of Withdrawals at Age 61. Assumes Single LifeElection, Covered Life is 60 at Issue. Contract Surrender ContractBenefit Payment Premium Value Amount Value Amount Base WP Annual AgeDate BOY BOY BOY EOY EOY EOY EOY LBP 60 Jan. 01, 2005 $100,000 $100,000$0 $102,000 $100,000 $100,000 5.0% $5,000 61 Jan. 01, 2006 $0 $102,000$5,000 $88,270 $95,000 $100,000 5.0% $5,000 62 Jan. 01, 2007 $0 $88,270$5,000 $75,776 $90,000 $100,000 5.0% $5,000 63 Jan. 01, 2008 $0 $75,776$5,000 $67,237 $85,000 $100,000 5.0% $5,000 64 Jan. 01, 2009 $0 $67,237$5,000 $65,971 $80,000 $100,000 5.0% $5,000 65 Jan. 01, 2010 $0 $65,971$3,768 $63,447 $76,232 $100,000 5.0% $5,000 66 Jan. 01, 2011 $0 $63,447$5,000 $60,201 $71,232 $100,000 5.0% $5,000 67 Jan. 01, 2012 $0 $60,201$5,000 $57,409 $66,232 $100,000 5.0% $5,000 68 Jan. 01, 2013 $0 $57,409$5,000 $52,933 $61,232 $100,000 5.0% $5,000 69 Jan. 01, 2014 $0 $52,933$5,000 $50,329 $56,232 $100,000 5.0% $5,000 70 Jan. 01, 2015 $0 $50,329$5,000 $48,956 $51,232 $100,000 5.0% $5,000 71 Jan. 01, 2016 $0 $48,956$5,000 $41,318 $46,232 $100,000 5.0% $5,000 72 Jan. 01, 2017 $0 $41,318$5,000 $37,408 $41,232 $100,000 5.0% $5,000 73 Jan. 01, 2018 $0 $37,408$5,000 $33,704 $36,232 $100,000 5.0% $5,000 74 Jan. 01, 2019 $0 $33,704$5,000 $30,139 $31,232 $100,000 5.0% $5,000 75 Jan. 01, 2020 $0 $30,139$5,000 $23,631 $26,232 $100,000 5.0% $5,000 76 Jan. 01, 2021 $0 $23,631$5,000 $18,258 $21,232 $100,000 5.0% $5,000 77 Jan. 01, 2022 $0 $18,258$5,000 $13,258 $16,232 $100,000 5.0% $5,000 78 Jan. 01, 2023 $0 $13,258$5,000 $8,671 $11,232 $100,000 5.0% $5,000 79 Jan. 01, 2024 $0 $8,671$5,000 $4,002 $6,232 $100,000 5.0% $5,000 80 Jan. 01, 2025 $0 $4,002$5,000 $0 $1,232 $100,000 5.0% $5,000 81 Jan. 01, 2026 $0 $0 $5,000 $0$0 $100,000 5.0% $5,000 82 Jan. 01, 2027 $0 $0 $5,000 $0 $0 $100,0005.0% $5,000 Example Notes: Client is 60 at issue, so 5 year wait is notsatisfied before first surrender. WP does not increase.

Example 10: Expand Example 7 to show effect of Rider Fee AccountSurrender Account Benefit Payment Premium Value Amount Value Amount BaseAnnual Rider Age Date BOM BOM BOM EOM EOM EOM LBP Fee 60 Jan. 01, 2005$100,000 $100,000 $0 $100,200 $100,000 $100,000 $4,500 $0 60 Feb. 01,2005 $0 $100,200 $0 $100,501 $100,000 $100,000 $4,500 $0 60 Mar. 01,2005 $0 $100,501 $0 $101,305 $100,000 $100,000 $4,500 $0 60 Apr. 01,2005 $100,000 $201,305 $0 $201,707 $200,000 $200,000 $9,000 $0 60 May01, 2005 $0 $201,707 $0 $203,724 $200,000 $200,000 $9,000 $0 60 Dec. 01,2005 $0 $212,883 $0 $213,521 $200,000 $200,000 $9,000 $0 61 Jan. 01,2006 $0 $212,721 $0 $213,572 $200,000 $200,000 $9,000 $800 61 Feb. 01,2006 $0 $213,572 $0 $214,640 $200,000 $200,000 $9,000 $0 61 Mar. 01,2006 $50,000 $264,640 $0 $265,434 $250,000 $250,000 $11,250 $0 61 Apr.01, 2006 $0 $265,434 $0 $266,496 $250,000 $250,000 $11,250 $0 62 Jan.01, 2007 $0 $265,496 $11,250 $254,754 $238,750 $250,000 $11,250 $1,00063 Jan. 01, 2008 $0 $253,754 $11,250 $243,232 $227,500 $250,000 $11,250$1,000 64 Jan. 01, 2009 $0 $242,232 $11,250 $232,829 $216,250 $250,000$11,250 $1,000 65 Jan. 01, 2010 $0 $231,829 $11,250 $221,021 $205,000$250,000 $12,500 $1,000 66 Jan. 01, 2011 $0 $220,021 $12,500 $209,596$192,500 $250,000 $12,500 $1,000 67 Jan. 01, 2012 $0 $208,596 $12,500$207,862 $180,000 $250,000 $12,500 $1,000 68 Jan. 01, 2013 $0 $206,862$12,500 $195,333 $167,500 $250,000 $12,500 $1,000 69 Jan. 01, 2014 $0$194,333 $12,500 $182,924 $155,000 $250,000 $12,500 $1,000 70 Jan. 01,2015 $0 $181,924 $12,500 $167,730 $142,500 $250,000 $13,750 $1,000 71Jan. 01, 2016 $0 $167,240 $20,000 $144,295 $122,500 $122,500 $6,738 $49072 Jan. 01, 2017 $0 $143,805 $6,738 $137,753 $115,763 $122,500 $6,738$490 73 Jan. 01, 2018 $0 $137,263 $6,738 $130,917 $109,025 $122,500$6,738 $490 74 Jan. 01, 2019 $0 $130,427 $6,738 $124,184 $102,288$122,500 $6,738 $490 75 Jan. 01, 2020 $0 $123,694 $6,738 $117,542$95,550 $122,500 $7,350 $490 76 Jan. 01, 2021 $0 $117,052 $7,350$110,031 $88,200 $122,500 $7,350 $490 77 Jan. 01, 2022 $0 $109,541$7,350 $102,600 $80,850 $122,500 $7,350 $490 78 Jan. 01, 2023 $0$102,110 $7,350 $94,949 $73,500 $122,500 $7,350 $490 79 Jan. 01, 2024 $0$94,459 $7,350 $87,370 $66,150 $122,500 $7,350 $490 80 Jan. 01, 2025 $0$86,880 $7,350 $80,167 $58,800 $122,500 $7,963 $490 81 Jan. 01, 2026 $0$79,677 $7,963 $71,858 $50,838 $122,500 $7,963 $490 82 Jan. 01, 2027 $0$71,795 $9,000 $15,699 $15,699 $15,699 $1,020 $63 Example Notes:Withdrawals occur before the fee is deducted. The partial surrender atage 71 exceeds the LBP. Therefore the BA is reset to the lesser of thecontract value after the partial surrender or the BA prior to thepartial surrender less the amount of the partial surrender. In thiscase, the BA prior to the partial surrender less the amount of thepartial surrender is less than the contract value. The surrender at age82 exceeds the LBP. Therefore the BA is reset to the lesser of thecontract value after the surrender, or the BA less the amount of thepartial surrender. In this case, the contract value after the surrenderis less than the Benefit Amount prior to the surrender less the amountof the surrender. For both withdrawals exceeding the LBP, the PB isreset to the BA after the partial surrender and the LBP is reset to thePB times the WP for the attained age of the covered life. For bothwithdrawals, the rider fee is based on the new PB after the withdrawal.Contingent Deferred Sales Charge (CDSC)—Free Up to the Amount of the LBP

If the LBP exceeds the actual withdrawal amount (AWA) on the most recentcontract anniversary, any contingent deferred sales charge (CDSC) willbe waived up to the LBP amount.

Guaranteed Minimum Death Benefit

A death benefit may be available on the death of an owner or annuitant.The death benefit provision guarantees that upon death a death benefitwill be paid equal to the greater of the benefit amount or the contractvalue as of the date proof of death is received. The rider fee is notassessed on death. When proof of death is processed, the contract willgo into suspense mode. No fees will apply during that period.

Contract Value (CV) Reduces Below Minimum Account Rules—Single LifeElections

If the contract value is reduced below the minimum account rules ineffect on a particular valuation day, and the LBP remains greater thanzero after the surrender, the following will occur;

-   -   The annuity commencement date will be attained and subsequent        premium payments will no longer be accepted.    -   An annuity will be issued under the fixed lifetime and period        certain payout annuity option. The frequency of payments may be        elected from those offered at such time, but will not be less        frequently than annually.        Fixed Lifetime and Period Certain Payout        (Applicable to the Contract Value (CV) Reduces Below Minimum        Account Rules—Single Life Elections)    -   The lifetime portion will be based on the covered life. The        covered life is the annuitant for this payout option.    -   If there is a natural joint owner, then lifetime portion will be        based on both contract owners. The owner and joint owner will be        the annuitant and joint annuitant for this payout option. The        lifetime portion will terminate on the first death of the two.    -   The minimum amount paid under this annuity options will at least        equal the BA.    -   If the oldest annuitant is age 59 or younger (or other        predetermined age), the annuity commencement date will be        automatically deferred until the oldest annuitant attains age 60        (or other predetermined age) and is eligible to receive payments        in a fixed dollar amount until the later of the death of any        Annuitant or a minimum number of years.    -   If the annuitant(s) are alive and age 60 or older (or other        predetermined age), payments will be received in a fixed dollar        amount until the later of the death of any Annuitant or a        minimum number of years.    -   The minimum number of years that payments will be made is equal        to the number of LBP payments, considering the increase in the        WP, required to reduce the BA to zero.    -   This annualized amount will be paid over the greater of the        minimum number of years, or until the death of any annuitant, in        the frequency that is elected.    -   The frequencies will be among those offered at that time but        will be no less frequently than annually.    -   If, at the death of any annuitant, payments have been made for        less than the minimum number of years, the remaining scheduled        period certain payments will be made to the beneficiary. A lump        sum option is not available.

These options may not be available if the contract is issued to qualifyunder Section 401, 403, 408, or 457 of the Internal Revenue Code of1986, as amended. For such contracts, this option will be available onlyif the guaranteed payment period is less than the life expectancy of theannuitant at the time the option becomes effective. Such life expectancywill be computed under the mortality table then in use.

Contract Value Reduces Below the Minimum Account Rules—Joint LifeElections

If the contract value is reduced below the minimum account rules ineffect on a particular valuation day and LBP remains greater than zeroafter the surrender, the following will occur:

-   -   The annuity commencement date will be attained and subsequent        premium payments will no longer be accepted.    -   If owner or owner's spouse is alive, an annuity will be issued        under the fixed joint and survivor lifetime and period certain        payout annuity option. The frequency of the payments may be        elected from those offered at such time, but will not be less        frequently than annually.    -   If either owner or owner's spouse is deceased, an annuity will        be issued under the fixed lifetime and period certain payout        annuity option. The frequency of the payments may be elected        from those offered at such time, but will not be less frequently        than annually.        Fixed Joint & Survivor Lifetime and Period Certain Payout        (Applicable to the Contract Value Reduces Below the Minimum        Account Rules—Joint Life Elections    -   The covered life and covered life's spouse will be the annuitant        and joint annuitant for this payout option. The lifetime benefit        will terminate on the last death of the two.    -   The minimum amount paid under this annuity options will at least        equal the BA.    -   If the younger annuitant is alive and age 59 or younger (or        other predetermined age), the annuity commencement date will be        automatically deferred until the younger annuitant attains age        60 (or other predetermined age) and is eligible to receive        payments in a fixed dollar amount until the death of the last        surviving annuitant or a minimum number of years.    -   If the annuitants are alive and the younger annuitant is age 60        or older (or other predetermined age), payments will be received        in a fixed dollar amount until the death of the last surviving        annuitant or a minimum number of years.    -   The minimum number of years that payments will be made is equal        to the number of LBP payments, considering the increase in the        WP, required to reduce the BA to zero.    -   The annualized amount will be paid over the greater of the        minimum number of years, or until the death of the last        surviving annuitant, in the frequency that is elected.    -   The frequencies will be among those offered at that time but        will be no less frequently than annually.    -   If, at the death of the last surviving annuitant, payments have        been made for less than the minimum number of years, the        remaining scheduled period certain payments will be made to the        beneficiary. A lump sum option is not available.        Fixed Lifetime and Period Certain Payout        (Applicable to the Contract Value Reduces Below the Minimum        Account Rules—Joint Life Elections)    -   The lifetime portion will be based on the covered life. The        covered life is the annuitant for this payout option.    -   The minimum amount paid under the annuity options will at least        equal the BA.    -   If the annuitant is age 59 or younger (or other predetermined        age), the annuity commencement date will be automatically        deferred until the annuitant attains age 60 (or other        predetermined age) and is eligible to receive payments in a        fixed dollar amount until the later of the death of the        annuitant or a minimum number of years.    -   If the annuitant is alive and age 60 or older (or other        predetermined age), payments will be received in a fixed dollar        amount until the later of the death of the annuitant or a        minimum number of years.    -   The minimum number of years that payments will be made is equal        to the number of LBP payments, considering the increase in the        WP, required to reduce the BA to zero.    -   The annualized amount will be paid over the greater of the        minimum number of years, or until the death of any annuitant, in        the frequency that is elected.    -   The frequencies will be among those offered at that time but        will be no less frequently than annually.    -   If, at the death of the annuitant, payments have been made for        less than the minimum number of years, the remaining scheduled        period certain payments will be made to the beneficiary. A lump        sum option is not available.

These options may not be available if the contract is issued to qualifyunder Section 401, 403, 408, or 457 of the Internal Revenue Code of1986, as amended. For such contracts, this option will be available onlyif the guaranteed payment period is less than the life expectancy of theannuitant at the time the option becomes effective. Such life expectancywill be computed under the mortality table then in use.

Covered Life Change(s)—Single Life Elections

Any contractual change which causes a change in the covered life willresult in a reset in the benefits provided under this rider.

Covered life changes in the first 12 months of the contract issue date(or other time period) will not cause a change in the BA or PB. However,the WP may change based on the attained age of the oldest covered lifeafter the covered life change. Covered life changes after the firstcontract year will cause a reset in the benefits.

-   -   If the oldest covered life after the change is less than age 81        (or other predetermined age) at the time of the change, then        either (i) or (ii) will automatically apply.    -   (i) If the rider is not currently available for sale, the        existing rider will continue with respect to the death benefit        only (i.e., the withdrawal feature will terminate). The rider        fee will terminate.    -   (ii) If the rider is currently available for sale, the existing        rider will continue with respect to all benefits, at the current        contract rider fee. The benefit amount will be reset to the        minimum of the contract value or the benefit amount on the date        of the change. The PB, WP and LBP will be recalculated on the        date of the change.    -   If the oldest covered life after the change is greater than or        equal to 81 (or other predetermined age) at the time of the        change, the rider continues with respect to the death benefit        only (i.e., the withdrawal feature will terminate). The death        benefit will be amended to contract value only. The rider fee        terminates.        Covered Life Change(s)—Joint Life Elections

If owner and owner's spouse are no longer married, for reasons otherthan death, the following the covered life changes may occur.

-   -   If surrenders have not been taken from the contract:    -   Drop spouse or replace original spouse with new spouse;    -   The covered life will be reset and the WP scale will be based on        the youngest covered life.    -   If surrenders have been taken from the contract:    -   Drop spouse;    -   The covered life will be reset and the WP scale will be based on        the youngest covered life.

Any other contractual change which causes a change in the covered lifewill result in the termination of withdrawal benefits under this rider.

The rider will continue with respect to the death benefit only (i.e.,the withdrawal feature will terminate). The death benefit will beamended to contract value only. The rider fee terminates.

Spousal Continuation

Single Life Election:

In the event the contract owner dies and spousal continuation iselected, the contract value will increase to the DB value (the greaterof the contract value and the BA). The covered life will bere-determined on the date of the continuation. If the covered life isless than age 81 (or other predetermined age) at the time of thecontinuation, then either of the following will automatically apply:

-   -   If the rider is not currently available for sale, the existing        rider will continue with respect to the death benefit only        (i.e., the withdrawal feature will terminate). The rider fee        will terminate.    -   If the rider is currently available for sale, the existing rider        will continue with respect to all benefits at the current        contract rider fee. The benefit amount and the payment base will        be set equal to the contract value on the continuation date. The        LBP will be recalculated on the continuation date.

If the covered life is greater than or equal to 81 (or otherpredetermined age) at the time of the continuation, the rider continueswith respect to the death benefit only (i.e., the withdrawal featurewill terminate). The death benefit will be amended to contract valueonly. The rider fee will terminate.

Spousal Continuation—Joint/Spousal Continuation Election

In the event that the contract owner dies and spousal continuation iselected, the spouse may do the following.

-   -   Continue the contract and not receive the death benefit.    -   Continue the contract and terminate the rider, the death benefit        will be paid into the contract value.    -   Terminate the contract and rider, death benefit will be paid.        If the spouse elects to continue the contract and not receive        the death benefit,    -   A death benefit will not be paid under the terms of this rider,        the contract or any other optional rider attached to and made        part of the contract.    -   The existing rider will continue with respect to all benefits,        at the current contract rider fee.    -   The benefit amount will be equal to the benefit amount on the        continuation date.    -   The payment base will be equal to the payment base on the date        of the continuation.    -   The LBP will not be recalculated on the continuation date.    -   The WP scale will continue to be based on the younger covered        life's attained age prior to the continuation date.    -   The contract owner cannot name a new spouse on the contract.    -   The rider will terminate on the death of the surviving covered        life.

If the spouse elects to continue the contract and receive the deathbenefit;

-   -   A death benefit will be paid according to the terms of this        rider, the contract or any other optional rider attached to and        made part of the contract.    -   The covered life will be re-determined on the date of the        continuation.    -   If the covered life is less than age 81 (or other predetermined        age) at the time of the continuation, then the existing rider        will continue with respect to the death benefit only (i.e., the        withdrawal feature will terminate). The rider fee will        terminate.    -   If the covered life is greater than or equal to 81 (or other        predetermined age) at the time of the continuation, the rider        continues with respect to the death benefit only (i.e., the        withdrawal feature will terminate). The death benefit will be        amended to contract value only. The rider fee will terminate.

Effect of Death of the Owner or the Annuitant Before the AnnuityCommencement Date—Single Life Election

The following tables describe the effect of death of the owner or theannuitant before the annuity commencement date for the single lifeelection.

TABLE 1 Single Life Election: If the Deceased is And . . . And . . .Then the . . . Contract There is a The annuitant Joint contract Ownersurviving is living owner receives contract owner or deceased the DB,rider terminates Contract There is no The annuitant Rider Ownersurviving is living terminates, contract owner or deceased designatedbeneficiary receives DB Contract There is no The annuitant Rider Ownersurviving is living terminates, contract owner or deceased estatereceives or beneficiary DB Annuitant Contract owner There is no Contractis living contingent continues, no annuitant and DB is paid, thecontract rider owner becomes continues the contingent annuitantAnnuitant Contract owner There is no Rider is living contingentterminates, annuitant and contract owner the contract receives DB ownerwaives their right to become the contingent annuitant Annuitant Contractowner Contingent Contingent is living annuitant is annuitant livingbecomes annuitant and the contract and rider continues AnnuitantContract owner There is no Contract owner is non-natural contingentreceives DB, person annuitant rider terminatesEffect of Death of the Owner or the Annuitant Before the AnnuityCommencement Date—Joint Life Election

TABLE 2 Joint/Spousal Continuation Election: If the Deceased is . . .And . . . And . . . Then the . . . Contract There is a The annuitantFollow spousal Owner surviving is living or continuation contract ownerdeceased rules for joint life elections Contract There is no Theannuitant Follow spousal Owner surviving is living or continuationcontract owner deceased rules for joint life elections Contract There isno The annuitant Rider Owner surviving is living or terminates, contractowner deceased estate receives or beneficiary DB Annuitant Contractowner The contingent Contract owner is non-natural annuitant is receivesDB, person - non- living or rider qualified deceased terminatescontracts Annuitant Contract Owner The contingent Follow spousal isnon-natural annuitant is continuation person - living rules for jointQualified life elections contracts Annuitant Contract owner Thecontingent Contract owner is non-natural annuitant is receives DB,person - deceased rider qualified terminates contractsEffect of Death After the Annuity Commencement Date.

The following table describes the effect of death after the annuitycommencement date.

TABLE 3 Effect of Death After the Annuity Commencement Date If theDeceased is . . . And . . . And . . . Then the . . . Annuitant Theannuitant Single life LBP cease, and is also the is elected remaining BAis contract owner paid in annual amounts no greater than the LBPAnnuitant The annuitant Joint life LBP cease, and is also the is electedremaining BA is contract owner, paid in annual and there is no amountsno surviving joint greater than the annuitant LBP Annuitant Theannuitant Joint life LBP continues is also the is elected contractowner, and there is a surviving joint annuitantRider Charge

The rider charge is equal to 40 bps (or other amount) times the paymentbase on each contract anniversary. The contract anniversary date is theday of the anniversary. All processing occurs after the end of the tradedate.

First—all other financial transactions.

Second—take the AMF.

Third—take the Rider Charge.

In case of total surrender, a pro rata share of the rider fee is equalto the rider fee percentage multiplied by the cumulative gross premium,multiplied by the number days since the last fee was assessed, dividedby 365.

The rider fee is withdrawn from each investment option in the sameproportion that the value of the investment option bears to the contractvalue.

-   -   Includes all investment options, including the fixed        accumulation feature.    -   Does not include the DCA plus feature. Any money in the DCA plus        feature is deducted from the contract value for purposes of        determining the proportional value of each investment option.

If a surrender is taken on any other date other than the contractanniversary and such surrender causes the total surrenders during theyear to exceed the LBP and reduces the contract value zero, a pro ratashare of the rider fee will be deducted from the amount otherwisepayable.

The rider charge will be discontinued once an annuity option availableunder the contract or rider becomes effective. The rider charge may belimited on fixed accounts based on state-specific regulations.

It will be a reserved right for the issuing company to increase therider fee up to a maximum rate of 0.75% (or other amount) anytime on orafter the fifth contract anniversary or 5 years from the date that theowner is last notified of a fee increase (or other time).

-   -   The fee will only be increased on riders eligible for future WP        increases.    -   If the WP in effect is the maximum allowed in the WP schedule,        no fee increase will apply.    -   If the rider is not eligible to future WP increase due to        surrender activity, no fee increase will apply.    -   If the rider fee is increased, the contract owner may deny the        fee increase. No additional WP increases will apply.    -   If the contract owner denies the fee increase, he/she will not        be able to accept the fee increase at a later date.        Fund Allocation Restrictions

The owner is required to participate in a quarterly rebalancing programand is required to provide written instructions that comply with thefollowing:

-   -   (1) At least 40%, but not more than 70% of the total allocations        must be allocated among sub-accounts in the following investment        categories: international/global equity], domestic equity,        capital preservation, and fixed income.    -   (2) No more than 40% of the total allocations must be allocated        among the following investment categories: small cap,        international alternative, and money market.    -   (3) The remaining amounts must be allocated among the other        investment categories so that the total allocations equal 100%.    -   (4) A periodic rebalancing date (from the 1st through the 28th        day of the month) must be chosen.    -   (5) The first rebalancing date must be scheduled to begin within        ninety-five (95) days from the GMWB effective date.    -   (6) The owner must agree to furnish new allocation instructions        that comply with the first three items listed above prior to any        future closure or elimination of a sub-account in which the        owner is invested.

The owner may request to change his/her instructions while the rider isin effect provided that each request complies with items (1)-(4) listedimmediately above.

On the later of the rider effective date and on each quarterlyrebalancing date thereafter, the account value will be automaticallyreallocated to maintain the percentage allocation among the sub-accountsthat have been selected. Any additional premiums must be allocated inaccordance with the sub-accounts and percentages that have beenselected. Transfer among sub-accounts may be requested while the rideris in effect provided that each request results in an allocation of theaccount value that complies with items (1)-(2) listed above as of theend of the last valuation period preceding receipt of the request. Onlypro-rata withdrawal requests affecting all sub-accounts in which theowner is invested will be accepted while the rider is in effect.

The issuing company reserves the right to impose additional limitationson the owner's ability to allocate to or make transfers involvingdesignated sub-accounts which may be made available in the future. Thecompany may waive the above restrictions.

Aggregation

For purposes of determining the BA under the rider, one or more deferredvariable annuity contracts issued to the owner with the rider attachedin the same calendar year may be treated as one contract. If thecontracts are aggregated, the period over which withdrawals are measuredagainst the payment benefit will change.

The effective date of the election until the end of the calendar yearwill be treated as a contract year for the purposes of the LBP limit. Apro rata rider charge will be taken at the end of that calendar year. Aslong as total withdrawals in that period do not exceed the LBP, thewithdrawals will not necessitate a reset.

In future calendar years, the LBP limits will be aggregated and will beon a calendar year basis. In other words, withdrawals under allaggregated contracts in a calendar year will be compared against thecombined LBP limits for the aggregated contracts.

-   -   If withdrawals exceed those combined limits, the aggregate BA        will be set to the combined contract values of the aggregated        contracts. The LBP will then equal the withdrawal percent        multiplied by the new BA.    -   If withdrawals do not exceed those combined limits, each        withdrawal will reduce the BA dollar for dollar. The withdrawal        benefits relating to the contract value reaching zero will not        apply until the contract value of all aggregated contracts        reaches zero.    -   The rider fee will be taken at the end of each calendar year. It        will be deducted pro rata from all of the sub-accounts and fixed        accounts of the aggregated contracts.    -   If the contract values of all aggregated contracts reach zero,        the annuity options on the life or lives of the owner(s) will be        offered. The lifetime and fixed period option will pay the        combined LBP for the lifetime of the owner(s) with a period        certain as defined earlier in this specification.        Annuity Commencement Date

If the annuity reaches the maximum ACD, which is the later of the10^(th) contract anniversary and the date the annuitant reaches age 90,the contract must be annuitized unless it is agreed upon to extend theACD. In this circumstance, the contract may be annuitized under standardannuitization rules, or alternatively, under the rules applicable whenthe contract value is below the minimum account rules in effect. Notethat the last option, a payout based on CV less than the minimum accountrules, will result in an annuity based on the life of the owner(s), notthe annuitant. The contract value need not be below our minimum accountrules at the ACD for the owner(s) to select this option.

Filing Preference

The filing preference field may have two separate riders, one for SingleLife and one for Joint Life. The riders will be launched individually asapproved by the individual states.

Premium Restrictions

Prior company approval is required on all subsequent premium paymentsreceived after the first 12 months. The approval rules are as follows.

-   -   1035 applications received with money are exempt from these        rules.    -   Invest Ease Programs will not accept any subsequent premium        payment in excess of two (2) times the original invest ease        amount. In order to qualify, the program must be in effect for        at least three (3) consecutive payment cycles.    -   Any other subsequent premium(s) will not be accepted if it is in        excess of the minimum of the cumulative first year premium or        $100,000.        Additional Annuity Contract(s) Rules

Additional terms of the contract(s) or rider(s) include the following.The benefits under the contract cannot be assigned. If the free lookprovision under the contract is exercised, the rider will terminate.

Subject to state approval, a rider will be made available to the ownersof the contracts currently available for sale, which are issued on orafter the date the rider is approved for sale in the state of issue.This does not imply post-issue election. The rider can only be electedat issue for new contacts. Post-issue election will be determined on anas needed basis.

Turning now to the figures, FIG. 1 illustrates the manner in which a newannuity contract application is processed. The new applicationprocessing routine starts (block 102) when an application is completed.The annuity contract application and initial premium are received by theinsurance company (block 104). The annuity contract is then establishedthrough the contract establishing routine (block 106) as furtherdescribed in FIG. 2. After the annuity contract is established, theaccount value is then set up through the account value set routine(block 108), via the computer systems, as further specified in FIG. 3.Thereafter customer communication is established through the customercommunication routine (block 110) as further specified in FIG. 4. Theapplication processing routine ends at (block 112).

FIG. 2 is a flow chart that illustrates in more detail the manner inwhich an annuity contract is established. The annuity contractestablishing routine starts at (block 202). After receiving the annuitycontract application, customer demographics are determined (block 204).The customer demographics and other data from the annuity contractapplication are transmitted to the insurance company by any suitablemeans, such as electronic transmission, facsimile transmission,telephonic transmission, and the like. The customer demographics may bescanned in or electronically entered into the computer system by theinsurance company after the demographic data is determined. Suchdemographic information may include age, gender, date of birth, socialsecurity number, address, marital status, and the like. The customerdemographics may be used for a variety of purposes, such asidentification purposes or to locate a relevant life by searchinghis/her social security number. The customer demographics are also usedwhen determining and/or calculating a variety of factors that arerelated to the annuity contract, such as benefit amount calculations,tax considerations, and the like. The types of customer demographicsthat are determined are generally related to the type of annuitycontract application that is filled out by the relevant life. Thespecific product election is determined (block 206). For example, thespecific product may be elected from a group of different variableannuity products which each have different characteristics including thecosts and fees as well as the liquidity features associated therewith.The election of optional riders is determined (block 208). For example,the optional riders may be elected from a group of different riderswhich each have various guaranteed withdrawal features. The election ofinvestment options is determined (block 210). For example, theinvestment options include money market funds, bond funds, stock funds,and the like. The beneficiary is elected (block 212). In one aspect,this is the person who will collect the death benefits, if any. Thesource of the premium is determined (block 214). For example, the sourceof the premium may come from the relevant life's personal funds or maycome from another annuity in the form of a transfer. It should beunderstood that the steps taken for establishing the contract mayproceed in various orders and that the order shown in FIG. 2 is forillustrative purposes only and is only one embodiment of said steps. Thecontract establishing routine ends at (block 216).

FIG. 3 is a flow chart that illustrates in more detail the manner inwhich an account value is set up. The account value set up routinestarts at (block 302). The funds are received (block 304). For example,the funds may be received via electronic transfer from a bank account orfrom another variable annuity holder. The funds are then allocated basedon investment elections (block 306). For example, the allocations can beaccomplished through a computerized system according to the investmentelections by the relevant life. Unit values are established for theannuity contract (block 308). For example, based on the performance ofthe underlying investment elections, unit values are established,preferably on a daily basis, for use in determining the resulting impacton the relevant life's annuity contract based on their specific fundallocations. For example the number of units that are applied to eachannuity contract is different for each relevant life based on the numberof units held within the annuity contract. It should be understood thatthe steps taken for setting up the account value may proceed in variousorders and that the order shown in FIG. 3 is for illustrative purposesonly and is only one embodiment of said steps. The account value set uproutine ends at (block 310).

FIG. 4 is a flow chart that illustrates in more detail the manner inwhich customer communication is established. The customer communicationroutine starts at (block 402). Communications with the customer may beaccomplished via email, facsimile, letter, telephone, and the like.Communication with the customer in one aspect relates to the issuing ofthe contract (block 404). Communication with the customer in one aspectrelates to the relevant confirmation of the previous contract issuancecommunication (block 406). Any regulatory-imposed communication with theclient is accomplished (block 408). It should be understood that thesteps taken for establishing customer communication may proceed invarious orders and that the order shown in FIG. 4 is for illustrativepurposes only and is only one embodiment of said steps. The customercommunication routine ends at (block 410).

FIG. 5 is a flow chart illustrating the appropriate steps after awithdrawal is requested. The withdrawal processing routine starts at(block 502). A withdrawal is first requested by the relevant life at(block 504). The withdrawal is then processed according to the contractrules (block 506). The contract rules are embedded in a computer systemor the like and vary according to the type of annuity contract. Forexample, in certain embodiments, a requested withdrawal amount by therelevant life may be limited by the contract rules to a specificwithdrawal percent that is applied by the computer system, and whereinthe contract rules specify the withdrawal percent according to the ageof the relevant life or the number of years since the contract wasestablished. Therefore, the contract rules govern the data flow in thecomputer system. The contract rules are administratively built into thecomputer system to obviate the need for manual intervention by theinsurance company. The account value is reduced according to thecontract rules (block 508). The death benefit is reduced according tothe contract rules (block 510). The withdrawal benefit is adjustedaccording to the contract rules (block 512). The check or other form ofpayment is issued (block 516). The appropriate tax forms are generatedat year end (block 518). It should be understood that the steps takenfor processing withdrawals may proceed in various orders and that theorder shown in FIG. 5 is for illustrative purposes only and is only oneembodiment of said steps. The withdrawal processing routine ends at(block 520).

FIG. 6 is a flow chart illustrating a preferred embodiment of thepresent invention comprising a data processing method for administeringa deferred variable annuity contract. It should be understood that theorder of the successive method steps is shown for the sake ofillustrating but one example and that the order of method steps canproceed in any variety of order. In one embodiment of the presentinvention, the invention comprises a data processing method foradministering a deferred variable annuity contract for a relevant life,the annuity contract having a payment base value, a contract value, andlifetime benefit payments. The present method begins at step 600. Thepresent method determines a payment base for said annuity contract(block 602) that is a function of the previous premium payments andwithdrawals by the relevant life. The present method determines awithdrawal percent for said annuity contract (block 604). If requestedby the relevant life, the present method periodically accepts premiumpayments from the relevant life (block 606) which increase the paymentbase and the contract value. If requested by the relevant life and thecovered life is older than a predetermined age (i.e. 60 years old), thepresent method periodically calculates a lifetime benefit payment forthe relevant life (block 608) which decreases the contract value. Ifrequested by the relevant life, the present method periodicallycalculates a withdrawal payment (block 610)—that is in excess of thelifetime benefit payment—for the relevant life which decreases each of:the contract value and the payment base. Preferably, the lifetimebenefit payment is related to a withdrawal percent and the withdrawalpercent automatically increases over the term of the annuity contractand therefore with the age of the relevant life.

It should be understood that several of the method steps of the presentinvention (for example blocks 602 and 604) require a computer to use themethod of the present invention; that is to say the calculations andappropriate data records must be accomplished by a computer. Forexample, in one embodiment of the present invention, the payment base isrelated to premium payments by the relevant life. A computer receivesthe payments and processes the appropriate calculations. In oneembodiment, the lifetime benefit payment is dependent on a pre-selectedwithdrawal percent. Preferably, the withdrawal percent is based on theage of the relevant life at the time of the requested lifetime benefitpayment. Preferably, the withdrawal percent automatically increases overthe term of the annuity contract and with the age of the relevant life,and these age-based withdrawal percents are set by the company issuingthe annuity.

The annuity commencement date is established according topre-established rules, subject to certain restrictions. The initialguaranteed death benefit amount is determined by calculations accordingto the present invention. Preferably, the initial guaranteed deathbenefit amount is established for calculation purposes. In a preferredembodiment, the initial guaranteed death benefit amount is equal to thepayment base. The administration of the deferred variable annuitycontract ends at (block 612).

Referring next to FIG. 7, depicted is a preferred embodiment of a systemon which the methods of the present invention may be implemented. In oneexample of the preferred embodiment, the insurance contract generatingsystem 714 would generally be used by an insurance provider 702, howeverthe system may be operated by any individual or organization offering aninsurance product as outlined in the present specification withoutdeparting from the spirit of the present invention. System 714 may beimplemented in many different ways such as part of a single standaloneserver or as a network server or servers which may be distributed acrossmultiple computing systems and architectures. Preferably, the centralprocessing computer or network server includes at least one controlleror central processing unit (CPU or processor), at least onecommunication port or hub, at least one random access memory (RAM), atleast one read-only memory (ROM) and one or more databases or datastorage devices. All of these later elements are in communication withthe CPU to facilitate the operation of the network server.

The network server may also be configured in a distributed architecture,wherein the server components or modules are housed in separate units orlocations. Each of the modules described may be implemented as singleservers or one or more or all of the modules may be incorporated into asingle server. These servers will perform primary processing functionsand contain at a minimum, a RAM, a ROM, and a general controller orprocessor. In such an embodiment, each server is connected to acommunications hub or port that serves as a primary communication linkwith other servers, clients or user computers and other related devices.The communications hub or port may have minimal processing capabilityitself, serving primarily as a communications router. A variety ofcommunications protocols may be part of the system, including but notlimited to: Ethernet, SAP, SAS™, ATP, Bluetooth, GSM and TCP/IP.

In the preferred embodiment, all of the modules described herein areoperably inter-connected via a central communications bus 738. Thecommunications bus 738 is able to receive information from each of themodules, as well as to transmit information from one module to another.The insurance contract generating system 714 further includes a displaymodule 704, and a generating module 706. The generating module is usedfor generating an insurance contract, wherein the insurance contractprovides coverage to an individual or group for at least one eventdefined in the insurance contract.

The insurance contract generating system 714 additionally includes apayment module 708 for making payments to an insured individual or groupfor a predetermined period of time as defined by the deferred annuityinsurance contract.

The system further comprises a beneficiary module 710 for choosing abeneficiary to receive payments from the insurance provider in theinstance of an insured individual's death. Furthermore, the systemcomprises a dependent module 712 for offering an insurance contractstructured according to the methods of the present invention todependents of an individual eligible for the insurance contractdescribed herein.

Additionally, the insurance contract generating system 714 includes: astorage drive 716 for receiving data stored on a storage disc, aprocessing module 718 for processing digital data received by andcontained in the insurance contract generating system 714, acommunication module 720 for bi-directional communication with externaland telecommunications systems, a data storage module 722 for storingand managing digital information, a text data input module 724 forinputting data in the form of text, and a data input module 726 forconverting to digital format documents and images and inputting theminto the insurance contract generating system 714.

Finally, the insurance contract generating system 714 includes: an audiodata input module 728 for receiving and inputting audio information, anaudio data output module 730 for outputting data in audio format (i.e.recorded speech, synthetically generated speech from digital text, etc),a memory module 732 for temporarily storing information as it is beingprocessed by the processing module 718, a universal serial bus interfacemodule 734 for receiving and transmitting data to and from devicescapable of establishing a universal serial bus connection, and a digitaldata input interface module 736 for receiving data contained in digitalstorage devices.

Data storage device may include a hard magnetic disk drive, tape,optical storage units, CD-ROM drives, or flash memory. Such data storagedevices generally contain databases used in processing transactionsand/or calculations in accordance with the present invention. In oneembodiment, the database software creates and manages these databases.Insurance-related calculations and/or algorithms of the presentinvention are stored in storage device and executed by the CPU.

The data storage device may also store, for example, (i) a program(e.g., computer program code and/or a computer program product) adaptedto direct the processor in accordance with the present invention, andparticularly in accordance with the processes described in detailhereinafter with regard to the controller; (ii) a database adapted tostore information that may be utilized to store information required bythe program. The database includes multiple records, and each recordincludes fields that are specific to the present invention such asinterest rates, contract value, payment base value, step up percent,premiums, subscribers, payouts, claims, etc.

The program may be stored, for example, in a compressed, an uncompiledand/or an encrypted format, and may include computer program code. Theinstructions of the program may be read into a main memory of theprocessor from a computer-readable medium other than the data storagedevice, such as from a ROM or from a RAM. While execution of sequencesof instructions in the program causes the processor to perform theprocess steps described herein, hard-wired circuitry may be used inplace of, or in combination with, software instructions forimplementation of the processes of the present invention. Thus,embodiments of the present invention are not limited to any specificcombination of hardware and software.

Suitable computer program code may be provided for performing numerousfunctions such as providing a deferred annuity insurance contract to anindividual, generating a deferred annuity insurance contract, and makingpayments to the individual as defined in the deferred annuity insurancecontract. The functions described above are merely exemplary and shouldnot be considered exhaustive of the type of function, which may beperformed by the computer program code of the present inventions.

The computer program code required to implement the above functions (andthe other functions described herein) can be developed by a person ofordinary skill in the art, and is not described in detail herein.

The term “computer-readable medium” as used herein refers to any mediumthat provides or participates in providing instructions to the processorof the computing device (or any other processor of a device describedherein) for execution. Such a medium may take many forms, including butnot limited to, non-volatile media, volatile media, and transmissionmedia. Non-volatile media include, for example, optical or magneticdisks, such as memory. Volatile media include dynamic random accessmemory (DRAM), which typically constitutes the main memory. Common formsof computer-readable media include, for example, a floppy disk, aflexible disk, hard disk, magnetic tape, any other magnetic medium, aCD-ROM, DVD, any other optical medium, punch cards, paper tape, anyother physical medium with patterns of holes, a RAM, a PROM, an EPROM orEEPROM (electronically erasable programmable read-only memory), aFLASH-EEPROM, any other memory chip or cartridge, a carrier wave asdescribed hereinafter, or any other medium from which a computer canread.

Various forms of computer readable media may be involved in carrying oneor more sequences of one or more instructions to the processor (or anyother processor of a device described herein) for execution. Forexample, the instructions may initially be borne on a magnetic disk of aremote computer. The remote computer can load the instructions into itsdynamic memory and send the instructions over an Ethernet connection,cable line, or even telephone line using a modem. A communicationsdevice local to a computing device (or, e.g., a server) can receive thedata on the respective communications line and place the data on asystem bus for the processor. The system bus carries the data to mainmemory, from which the processor retrieves and executes theinstructions. The instructions received by main memory may optionally bestored in memory either before or after execution by the processor. Inaddition, instructions may be received via a communication port aselectrical, electromagnetic or optical signals, which are exemplaryforms of wireless communications or data streams that carry varioustypes of information.

Servers of the present invention may also interact and/or control one ormore user devices or terminals. The user device or terminal may includeany one or a combination of a personal computer, a mouse, a keyboard, acomputer display, a touch screen, LCD, voice recognition software, orother generally represented by input/output devices required toimplement the above functionality. The program also may include programelements such as an operating system, a database management system and“device drivers” that allow the processor to interface with computerperipheral devices (e.g., a video display, a keyboard, a computer mouse,etc).

For example, a user provides instructions for the amount of the livingbenefit payment that is requested. It should be understood that the usermay communicate with the computing system directly or indirectly throughanother party, such as the insurance provider 702. In the event the usercommunicates with an insurance provider 702, the insurance provider 702then receives and transfers information, to and from the insurancecontract generating system 714 via the text data input module 724, audiodata input module 728, audio data output module 730 and the displaymodule 704. For example, the user provides instructions for the amountof the living benefit payment that is requested. As used herein the datastorage module 722 is also referred to as a storage device. Theprocessing module 718 is contained within the insurance contractgenerating system 714, which is coupled to the storage device, thestorage device stores instructions that are utilized by the processor.The instructions comprise: (i) an instruction for determining a presentpayment base; (ii) an instruction for determining a present contractvalue; (iii) an instruction for determining a withdrawal percent; and(iv) an instruction for calculating a lifetime benefit payment; whereinthe lifetime benefit payment is related to the withdrawal percent andwherein the withdrawal percent automatically increases over the term ofthe annuity contract.

FIG. 8 shows a table 800 illustrating exemplary withdrawal percentages806, which are illustrated under “Withdrawal Percent” column 804 as afunction of age. More specifically, table 800 illustrates a withdrawalpercent chart that provides the withdrawal percent 806 that correspondswith the various attained ages 808 of the relevant life. “Attained Age”column 802 illustrates the various attained ages 808. Preferably, thelifetime benefit payments are not allowed to be made until the relevantlife has reached the age of 60 as shown by table 800. In this example,the initial investment is $100,000.

Turning to FIG. 9, shown is table 900, which illustrates exemplarylifetime benefit payments 908 and 910 as a function of age for annuitiesassociated with various withdrawal percents. The data in table 900directly corresponds with the data from above-referenced table 800 (i.e.the withdrawal percents that correspond to each age group as shown inFIG. 8 are directly applied to the example illustrated by FIG. 9). Morespecifically, table 900 illustrates hypothetical lifetime benefitpayments 908 and 910, which correspond to various withdrawal percents asapplied to Method A and Method B of the present invention, respectively.The formula used to calculate the lifetime benefit payment amounts inthis example is: Lifetime Benefit Payment=Withdrawal Percent×PaymentBase. In Method A, the withdrawal percent is 5% for all attained ages.In Method B, the withdrawal percent automatically increases over theterm of the annuity contract and based on the attained age of therelevant life as provided by the withdrawal percent table 800. “LifetimeBenefit Payments based on Method A” column 904 illustrates thehypothetical lifetime benefit payments 908 according to a “flat”withdrawal percent that is locked in at 5% no matter the attained age ofthe relevant life. “Lifetime Benefit Payments based on Method B” column906 illustrates the hypothetical lifetime benefit payments 910 accordingto the withdrawal percents provided by the withdrawal percent table 800,wherein the withdrawal percent automatically increases over the term ofthe annuity contract. Additionally, “Age” column 902 illustrates the ageof the relevant life. In this example, the age of the relevant liferanges from 60 to 85. Furthermore, it is important to note that thewithdrawal percent continues to automatically increase even after thelifetime benefit payments 910 have begun to be taken by the relevantlife. In this example, for the purposes of illustration, lifetimebenefit payments 908 and 910 have not been taken; instead the valueslisted are the hypothetical amount that is available for each period.

It is important to note that the present invention preferably allows therelevant life to select the present payment base (rather than theoriginal payment base) or the present contract value (rather than theoriginal contract value) as the withdrawal base. In the exampleillustrated by FIG. 8, the payment base does not change from itsoriginal value because there are no additional premium payments andthere are no withdrawals in excess of the lifetime benefit payments.Therefore, in the example, the present payment base is always equal tothe original payment base. However, it should be noted that in somesituations the payment base value will change over time from itsoriginal value; preferably, the relevant value of interest in thepresent invention is therefore the present payment base, not theoriginal payment base. In another embodiment, the original payment baseis used for the selection of the withdrawal base.

FIG. 10 depicts graph 1000, which illustrates the lifetime benefitpayments based on Method A and Method B as described above with respectto FIG. 9. Graph 1000 further illustrates the effects of variouswithdrawal percents utilized and corresponds to the data provided bytable 800 of FIG. 8 and table 900 of FIG. 9. Furthermore, graph 1000includes a “Lifetime Benefit Payment” scale 1002, which illustrates“Lifetime Benefit Payment” values 1010, and 1012 as a function of age1008 for annuities associated with “Lifetime Benefit Payments Based onMethod A” 1006 and “Lifetime Benefit Payments based on Method B” 1004,respectively. The function of age 1008 is measured in years and isillustrated on the x-coordinate of graph 1000 so as to accuratelycorrespond to table 900 of FIG. 9. For example, graph 1000 illustrates,“Lifetime Benefit Payment based on Method B” as a line with a trianglesymbol, which initially starts at a “Lifetime Benefit Payment” value1012 of $5,000. At age 65, as displayed on graph 1000, Lifetime BenefitPayment based on Method B” 1004 shows a positive incline from age 60 andillustrates a “Lifetime Benefit Payment” value 1012 of $5,500, whichaccurately corresponds to the appropriate values represented in table900 of FIG. 9. Further, as illustrated in graph 1000, “Lifetime BenefitPayment based on Method B” 1004 continues to positively incline andstabilize in accordance to the values represented in “Lifetime BenefitPayment based on Method B” column 906 as depicted in table 900 of FIG.9.

Additionally, as illustrated by graph 1000, the hypothetical lifetimebenefit payments continue to automatically rise when the withdrawalpercent automatically rises (and when the payment base remains thesame). Conversely, the hypothetical lifetime benefit payments are thelowest when using the original withdrawal percent that remains “flat”over the term of the annuity contract. The present invention providesthe relevant life with the potential for greater lifetime benefitpayments because the withdrawal percent automatically increases with theterm of the annuity contract and with the age of the relevant life. Itis important to note that for the purposes of illustration, the examplein FIGS. 8, 9, and 10 illustrates hypothetical lifetime benefit paymentsthat are not actually requested. That is, the payment base value isnever reduced or increased in this hypothetical example. It is importantto note that the relevant life can elect to request an amount for thelifetime benefit payment that is less than the available amount for eachperiod.

The following description and examples further illustrate the preferredfeatures of the present invention.

The lifetime benefit payment withdrawal may be determined by either ofthe following formulas or by the greater of the two formulas:LBP withdrawal=(the Payment Base)×(the Withdrawal Percent);LBP withdrawal=(the Contract Value)×(the Withdrawal Percent).

The lifetime benefit payment is paid periodically: such as yearly,quarterly, monthly, weekly, etc. The lifetime benefit payment that isrequested by the relevant life for a given period may be any amountgreater than zero and equal to or less than the greater of (the paymentbase)×(the withdrawal percent); and (the present contract value)×(thewithdrawal percent). The available lifetime benefit payment isdetermined at each period by the aforementioned formula.

In most cases, the value of (the payment base)×(the withdrawal percent)will not be equal to (the present contract value)×(the withdrawalpercent). Therefore, the higher of these two values is the highestavailable lifetime benefit payment available for that period. However,the relevant life does not have to elect the highest possible availablelifetime benefit payment. The value that is requested, if any, for thelifetime benefit payment for that period will be subtracted from thecontract value and the benefit amount, but not from the payment base.Therefore, the higher the lifetime benefit payment requested for aperiod, then the greater the possible impact on the value of (thepresent contract value)×(the withdrawal percent) for the subsequentperiod.

Preferably, the withdrawal percent is a function of the relevant life'sage. Preferably, the withdrawal percent automatically continues to riseover the term of the annuity contract and with the relevant life's age,no matter if the relevant life has already begun to take lifetimebenefit payments. In one embodiment, the lifetime benefit payment is notavailable until the relevant life reaches a predetermined agerequirement, such as 60 years old.

In one embodiment, the withdrawal percent is:

a. 5.0% for lifetime benefit payments taken between ages 60 and 64,

b. 5.5% for lifetime benefit payments taken between ages 65 and 69,

c. 6.0% for lifetime benefit payments taken between ages 70 and 74,

d. 6.5% for lifetime benefit payments taken between ages 75 and 79, and

e. 7.0% for lifetime benefit payments taken on or after age 80.

In one embodiment, if the relevant life takes a lifetime benefit paymentwithin the first 5 years of the contract, then the withdrawal percentwill not automatically increase over the term of the annuity contract orwith the age of the relevant life, and will instead remain equal to thewithdrawal percent at the time of the first lifetime benefit payment.

In a further embodiment, the present method further comprises the stepof collecting a rider fee or collecting an account maintenance fee. Inanother embodiment, the present method further comprises the step of:determining a benefit amount for the annuity product that is equal tothe premium payments minus any lifetime benefit payments or withdrawals.In a further embodiment, if the relevant life requests a withdrawalpayment—that is in excess of the lifetime benefit payment—then thepayment base is reset to equal the present benefit amount. In a furtherembodiment, the present method further comprises the step of:calculating a death benefit to a beneficiary upon the death of therelevant life, wherein the death benefit is equal to the present benefitamount. In a further embodiment, the present method further comprisesthe step of: calculating a death benefit to a beneficiary upon the deathof the relevant life, wherein the death benefit is the greater of: (a)the present benefit amount; and (b) the present contract value. In afurther embodiment, the present method further comprises the step of:calculating a death benefit to a beneficiary upon the death of therelevant life, wherein the death benefit is the greater of: (a) apredetermined guaranteed death benefit amount; and (b) the presentcontract value. Alternatively, the death benefit is paid to thebeneficiary only if the relevant life dies during the accumulationphase. Preferably, the value of the annuity payments, if any, equals thevalue of the last guaranteed lifetime benefit payment.

In another embodiment, the present invention comprises a deferredvariable annuity contract comprising: (a) means for determining apresent payment base; (b) means for determining a present contractvalue; (c) means for determining a withdrawal percent; (d) means forcalculating a lifetime benefit payment; wherein the lifetime benefitpayment is related to the withdrawal percent and wherein the withdrawalpercent automatically increases over the term of the annuity contract.

In another embodiment, the present invention comprises a deferredvariable annuity product comprising: (a) means for determining a paymentbase; (b) means for determining a contract value; (c) means fordetermining a withdrawal percent; (d) means for calculating a lifetimebenefit payment; wherein the lifetime benefit payment is related to thewithdrawal percent and wherein the withdrawal percent automaticallyincreases over the term of the annuity contract.

In another embodiment, the present invention comprises a system foradministering a deferred variable annuity product during theaccumulation phase, the improvement comprising: administration meansoperative to calculate a lifetime benefit payment, wherein the lifetimebenefit payment is related to a withdrawal percent and wherein thewithdrawal percent automatically increases over the term of the annuitycontract.

In another embodiment, the annuity product includes a step-up provisionwherein the payment base is increased in response to positiveperformance of the underlying investments of the contract for a givenperiod.

Other formulas may be utilized to determine the available lifetimebenefit payment amount, wherein the withdrawal base is related to othervalues besides the payment base and/or the contract value.

Having thus described the invention in rather full detail, it will beunderstood that such detail need not be strictly adhered to, but thatadditional changes and modifications may suggest themselves to oneskilled in the art, all falling within the scope of the invention asdefined by the subjoined claims.

While the present invention has been described with reference to thepreferred embodiment and several alternative embodiments, whichembodiments have been set forth in considerable detail for the purposesof making a complete disclosure of the invention, such embodiments aremerely exemplary and are not intended to be limiting or represent anexhaustive enumeration of all aspects of the invention. The scope of theinvention, therefore, shall be defined solely by the following claims.Further, it will be apparent to those of skill in the art that numerouschanges may be made in such details without departing from the spiritand the principles of the invention. It should be appreciated that thepresent invention is capable of being embodied in other forms withoutdeparting from its essential characteristics.

1. A computerized financial instrument management system, comprising: adata storage device storing data indicative of: an account having anaccount balance, the account balance being initially based upon anamount deposited to the financial instrument and subsequently based onchanges in value of one or more funds selected by a financial instrumentowner, withdrawals made by the financial instrument owner, andsubsequent deposits to the financial instrument; a payment base valuebased initially upon the amount deposited to the financial instrument; aguarantee of availability of benefit payments for a term, during each ofa plurality of time periods during the term, without reduction of thepayment base value; and a plurality of withdrawal factor values, thewithdrawal factor values being greater than zero and increasing afterthe first of the benefit payments; and a processor in communication withthe data storage device and associated non-transitory computer-readablemedium, the computer-readable medium having computer-readableinstructions which, when executed by the processor, cause the processorto: determine, for any selected one of the time periods during the term,an available amount of the benefit payment, the determining comprising:accessing from the data storage device data indicative of a withdrawalfactor value and at least one of a payment base value and an accountbalance value; and based on the accessed data indicative of thewithdrawal factor value and either the payment base value or the accountbalance value, determining an available amount of the benefit payment;and store the determined available amount in the data storage device andcommunicate with an associated display device for display of thedetermined available amount together with other data associated with thefinancial instrument.
 2. The system of claim 1, wherein thecomputer-readable instructions further cause the processor to: access adate value associated with the selected time period; and access from thedata storage device a value of the withdrawal factor corresponding tothe accessed date value.
 3. The system of claim 1, wherein the financialinstrument is a deferred variable annuity during the accumulation phase.4. The system of claim 1, wherein the data stored in the data storagedevice further includes a data indicative of a plurality of ages of arelevant life, and data correlating the stored withdrawal factor valuesto the stored plurality of ages.
 5. The system of claim 4, wherein thedata indicative of a plurality of ages comprises at least one multi-yearage range and data correlating the at least one multi-year age range toa single one of the stored withdrawal factor values.
 6. The system ofclaim 5, wherein the data indicative of a plurality of ages furthercomprises data indicative of a plurality of multi-year age ranges, anddata correlating each multi-year age range with data indicative of awithdrawal factor value, the withdrawal factor value increasing withincreasing age reflected in the data indicative of the multi-year ageranges.
 7. The system of claim 6, wherein the data indicative of awithdrawal factor value comprises data indicative of a withdrawalpercent value, and wherein the instructions further cause the processorto determine an available amount of the benefit payment by multiplyingthe accessed withdrawal percent value by either the payment base valueor the account value.
 8. The system of claim 1, further comprising apayment module in communication with the processor for receiving dataindicative of an amount of a benefit payment and for making the benefitpayment to a relevant life.
 9. A computer-implemented method formanagement of data related to financial instruments, comprising:accessing by a processor data related to a financial instrument from adata storage device in communication with the processor, the datastorage device storing data indicative of: an account having an accountbalance, the account balance being initially based upon an amountdeposited to the financial instrument and subsequently based on changesin value of one or more funds selected by a financial instrument owner,withdrawals made by the financial instrument owner, and subsequentdeposits to the financial instrument; a payment base value basedinitially upon the amount deposited to the financial instrument; aguarantee of availability of benefit payments for a term, during each ofa plurality of time periods during the term, without reduction of thepayment base value; and a plurality of withdrawal factor values, thewithdrawal factor values being greater than zero and increasing afterthe first of the benefit payments; determining by the processor, for anyselected one of the time periods during the term, an available amount ofthe benefit payment, based on data accessed from the data storage deviceindicative of a withdrawal factor value and at least one of a paymentbase value and an account value; storing by the processor the availableamount in the data storage device; and communicating by the processorwith an associated display device for display of the determinedavailable amount of the benefit payment together with other dataassociated with the financial instrument.
 10. The computer-implementedmethod of claim 9, wherein the financial instrument is a deferredvariable annuity during the accumulation phase.
 11. Thecomputer-implemented method of claim 10, wherein the data stored in thedata storage device further comprises data indicative of the term forwhich the benefit payments are guaranteed being a lifetime of a relevantlife.
 12. The computer-implemented method of claim 9, furthercomprising: receiving by the processor during one of the time periodsvia a communications device data indicative of an amount of a requestedwithdrawal from the financial instrument; accessing by the processorfrom the data storage device data indicative of a cumulative amount ofwithdrawals, prior to the requested withdrawal, during the time period;determining by the processor data indicative of a total amount ofwithdrawals during the time period based on the data indicative of theamount of the requested withdrawal and the data indicative of thecumulative amount of prior withdrawals during the time period; comparingby the processor the data indicative of the determined total amount ofwithdrawals to the data indicative of the determined amount of thebenefit payment available during the time period; and responsive todetermining via the comparison that the determined total amount ofwithdrawals is not greater than the determined amount of the benefitpayment available during the time period, providing by the processordata for display on the associated display device indicative that thepayment base value will not be reduced as a result of the requestedwithdrawal.
 13. The computer-implemented method of claim 9, furthercomprising: receiving by the processor during one of the time periodsvia a communications device data indicative of an amount of a requestedwithdrawal from the financial instrument; accessing by the processorfrom the data storage device data indicative of a cumulative amount ofwithdrawals, prior to the requested withdrawal, during the time period;determining by the processor data indicative of a total amount ofwithdrawals during the time period based on the data indicative of theamount of the requested withdrawal and the data indicative of thecumulative amount of prior withdrawals during the time period; comparingby the processor the data indicative of the determined total amount ofwithdrawals to the data indicative of the determined amount of thebenefit payment available during the time period; and responsive todetermining via the comparison that the determined total amount ofwithdrawals is greater than the determined amount of the benefit paymentavailable during the time period, providing by the processor data fordisplay on the associated display device indicative that the paymentbase value will be reduced as a result of the requested withdrawal. 14.The computer-implemented method of claim 9, further comprising accessingby the processor from the data storage device data indicative of acurrent age of a relevant life, data correlating ages to values ofwithdrawal factors, and selecting a value of the withdrawal factorcorresponding to the current age of the relevant life.
 15. Thecomputer-implemented method of claim 9, wherein the data indicative ofwithdrawal factor values comprises data for determining a currentwithdrawal factor value based on data including a current age of arelevant life.
 16. A non-transitory computer-readable medium formanagement of data relating to financial instruments, the medium havingprocessor-executable instructions stored thereon, which instructions,when executed by a processor, cause the processor to: responsive toreceipt of data indicative of a request to determine an available amountof a benefit payment, from a financial instrument, during a time periodof a term of a guarantee of available benefit payments, access from adata storage device: data indicative of a withdrawal factor value, thedata storage device storing data indicative of withdrawal factor values,the withdrawal factor values being greater than zero and increasingafter the first of the benefit payments; and at least one of: a balanceof an account of the financial instrument, the account balance beinginitially based upon an amount deposited to the financial instrument andsubsequently based on changes in value of one or more funds selected bya financial instrument owner, withdrawals made by the financialinstrument owner, and subsequent deposits to the financial instrument;and a payment base value based initially upon the amount deposited tothe financial instrument, benefit payments in accordance with theguarantee not reducing the payment base value; based on the accesseddata indicative of the withdrawal factor value and the account balanceor payment base value, determine an available amount of the benefitpayment during the time period; store the available amount in the datastorage device; and communicate with an associated display device fordisplay of the determined available amount of the benefit paymenttogether with other data associated with the financial instrument. 17.The non-transitory computer-readable medium of claim 16, wherein thefinancial instrument is a deferred variable annuity during theaccumulation phase.
 18. The non-transitory computer-readable medium ofclaim 17, wherein the time period is a year in duration commencing on ananniversary of an issue date of the financial instrument.
 19. Thenon-transitory computer-readable medium of claim 17, wherein theinstructions further cause the processor to: responsive to receipt ofdata indicative of a request for a withdrawal, determine data indicativeof a total amount of withdrawals during the time period including theamount of the requested withdrawals and any prior withdrawals during thetime period; compare the data indicative of the determined total amountof withdrawals to the data indicative of the determined available amountof the benefit payment during the time period; responsive to determiningvia the comparison that the determined total amount of withdrawals isnot greater than the determined amount of the benefit payment availableduring the time period, provide data for display on the associateddisplay device indicative that the payment base value will not bereduced as a result of the requested withdrawal; and responsive todetermining via the comparison that the determined total amount ofwithdrawals is greater than the determined amount of the benefit paymentavailable during the time period, providing by the processor data fordisplay on the associated display device indicative that the paymentbase value will be reduced as a result of the requested withdrawal. 20.The non-transitory computer-readable medium of claim 17, wherein thedata indicative of the guarantee comprises data indicative that thebenefit payments are available for a term commencing upon a minimum ageof a relevant life and continuing for a lifetime of the relevant life.